Took a hit last Thursday in 3 of my accounts. I had trading put on another QQQQ spread and kept the DIA spread I had before. I went all out near closing in another account on some Apr DIA 127 PUTS expiring Friday. The trade was that I would be out by 4:15pm before GOOG released earnings. Generally when it's a big company whose news can affect the market people sell the market off just before the news. DIA trades options trades until 4:15 pm. So at 4:10 I am up nicely on those PUTS. I am wresting with whether I should just take the profit and run then boom GOOG released news. At I hear on the news they beat. Instead of me selling then I hesitated to get more clarification and by that time I watched my profit of $0.70 per contract turned into $0.35 per contract loss and instead of me selling then. I hesitated till 4:15 pm. Ding can't sell anymore. Next day, Friday and expiration. Market opens up high. DIA @ > 128. Options worth $0.40. I still didn't sell. THen they dwindle down to $0.05 Still didn't sell. Lost all that money.
Another hard knocks lesson re-learned. Sell! Sell! Sell! You can never go broke from taking profits early. You can be in the game if you don't lose money. If you are losing money. Cut your losses quickly, especially on high risk trades. Always have an exit strategy and follow it. Use stop loss on high risk trades whenever possible.
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