Last December, just a couple days before the end of the year, I bought SPY January 15th Puts for what I thought, at the time, were ridiculously out of the money for such a short trading period – essentially two weeks. They cost $0.56 for each contract.
Back then the SPY ETF was just north of 211.
Now, ten trading days later, it sits at 188.
Along the way down, or up depending how one looks at it, I incrementally sold my options protecting my profits from the dead cat bounce / recovery that I thought for sure was about to happen.
It never did.
Sure there were a couple up days (2 to be exact) on the way down but they were just fakes. And yes I sold the fakes.
But I kept one lonely option, just to see what would happen.
Today, I sold my last remaining lonely put for $9.05.
WHAT! ARE YOU CRAZY! THINK ABOUT HOW MUCH MONEY YOU WOULD HAVE IF YOU HAD ONLY HELD ON TO ALL THOSE OPTIONS!
But I don’t play by those rules. And I don’t drive myself crazy thinking about it either.
I protect profits just as much as I protect original capital.
After all, I sold those other options for, on average, a 270% profit. Who wouldn’t like returns like that!
I didn’t trust the market back then, and I still don’t trust it today!
Never catch a falling knife . . . they say
Never chase profits . . .
Pigs get slaughtered . . .
I have no idea what is going to happen next.
So I think I will just sit on the sidelines and wait for this market to start a real false bull market recovery putting an end to this stupid downward spiral.
At least for a couple days . . .
Nothing falls forever . . . right?
The world still needs oil . . . right?