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Monday, September 22, 2008
Matt's Trade Log - 9/22/08
Only one trade today, a Buy 1 RIG JAN10 100 call. Got a buy signal on RIG, and I hope it isn't a fake.
I haven't been speaking much about exit strategy on entered positions, which I believe is a mistake. So I'll start today. RIG's mark is at about 125 today, with a resistance at about 132. So when RIG hits about 130ish, it will be time to consider the position again. On the downside, RIG's reasonable near-term support is at about 120, which is still above the call strike. Should 120 become a resistance line (if RIG falls through 120 and stays), then we'd have to consider cutting our losses.
One nice thing about this option is that the breakeven point, if I held it to expiration (which I won't), is only at about 139, which is a very doable price point for RIG over the next year. Another good thing is that it only contributes a negative theta of about 2, meaning it really isn't losing that much value every day. That's the benefit of buying long-term options.
I haven't been speaking much about exit strategy on entered positions, which I believe is a mistake. So I'll start today. RIG's mark is at about 125 today, with a resistance at about 132. So when RIG hits about 130ish, it will be time to consider the position again. On the downside, RIG's reasonable near-term support is at about 120, which is still above the call strike. Should 120 become a resistance line (if RIG falls through 120 and stays), then we'd have to consider cutting our losses.
One nice thing about this option is that the breakeven point, if I held it to expiration (which I won't), is only at about 139, which is a very doable price point for RIG over the next year. Another good thing is that it only contributes a negative theta of about 2, meaning it really isn't losing that much value every day. That's the benefit of buying long-term options.
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