Stay Firm with Yourself

It was a remarkable day for stock option traders up until 2 p.m., as during that time period the following occurred:

* Theoretical Dow tops hit 11,219, and our Nov525 Call hit 14.50, allowing us good profits from our two buys, and we're out.
* Theoretical Dow lows hit 11,052 allowing traders to take entry to the November 510 P at lows of 2.60 and sell to highs of 3.60

* For those trading the more OTM CAll, November 550C, it hit 2.81 by 2 p.m. and may be the only open signal you're left with

We will list all options today, as all stop loss or end by end of day, and will take no new options, as we do not want to hold any inventory over the weekend. We'll make note that the put, although profitable yesterday, could be held over the week-end.

Trader Questions of Floyd:
1. Do you place your stop loss orders right away on options?
Index options do not allow live stop orders because the market is then moved to the lowest stop loss.
If using # of days as a stop loss, stay firm with the rule.
Whatever stop loss you define: Stay firm with yourself.

2. I'm doing too well. I've made money now on 38 straight trades, and only one loss. I am afraid to continue trading because of "luck"
When doing well, trade on. Watch greed carefully and take lower profits.
Be sure to move at least 10% of your profits EVERY time to "outside of your trading bank." This hiding 10% from the profits is a superb discipline to help you in bad times, if you screw up, or to use for other investment at a later date.