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RT's,
First, many thanks to those who sent me recommendations about
methods for closing my small but profitable options position.
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> I need some advice about the best way to close a small but profitable
> stock option position. I am long two September 30 calls (NBQIF)for
> NBTY (Nature's Bounty--vitamins and such).
~~~~~
I was amazed at the depth of experience and knowledge in all areas of
trading, from the CBOE floor on up. This group has a lot to offer.
I think I learned more from the variety of suggestions than I have
during the weeks of studying the trade as it unfolded. For the
record, I closed the trade today at a double minus commissions.
Ran scared and decided to take my profits and go home. After
three strong up days, the underlying turned down in early trading,
so I pulled the plug.
I'm still a trading "gringo" so many of you probably already know
what I learned. Just to re-cap:
1). Amatuers buy options, pro sell them. Until I can
comfortably do both, I'm not really trading, but guessing and
hoping. Got lots of advice about legging into a bull spread. For
this particular stock and option, there weren't any options
available to help guide me in pricing my offer, so I gave up.
2). Got a lot of advice about why we shouldn't depend on stops
to protect a position in a thinly traded market and how the floor
likes to make a run on these small orders. Got a lot of advice about
thin markets in general. Illiquidity can kill even the best trade.
3). I now understand the overwhelming need for a trading plan, so
I don't have to make the really important decisions on the fly,
dealing with emotional issues, rather than business ones.
4). I was amazed at the stress I felt during the trade and the
relief I felt after I closed it. Until I can control that
emotional roller-coaster, I don't think I'm going to be a very
profitable trader. Funny thing, though, I'm ready to do it
again. Kinda fell lost not having a trade to worry about.
Thanks again. Still lots to learn.
James
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