Planning the next options trade., page-7

Cerhob

Would you rather buy a stock at $5.00, or $6.00 ??

The answer is obviously $5.00!!

... and conversly ould you rather well a sell a stock at $6.00 or $7.00 ??

$7.00 is the sensible answer...



I shorted BIL at the top of its rally at $7.00, and then rode the fall down to $6.00 - where i exited.

My reading of the situation was that it would rally from this point up to about $6.50. It was following my script beautifully... until the unexpected profit announcement this morning. ( The warning was expected by the market, however, the early timining and significant magnitude was a suprise.)

In nine cases out of ten, if i had followed your strategy of holding the put at $6.00, i would have lost... it just so happens that an extraordinary unexpected event has occured.