Irrationally mad decision making to obtain the American Dream.

Sold out of FSLR FEB 210 CALLS @ $13 GTC order, lucky, +27% profit

A person just recently commented on my last post that he “hopes” I stayed in the trade. Actually this entire morning before turning on my computer every single time the word “hope” came as a thought for my GTC order @ $13 came into my head I would try to come up with another word or think another reason rather then hope. Hope is truly a gamblers word. I want to delete it from my personal trading vocabulary. Any other word sounds better used then hoping an investment goes up or down, if I am hope it’s likely a low probability bad trade.

Symbol: .HJQBB
Description: FSLR FEB 210 Call
Stock: FSLR at 219.20
Action: Sold To Close
Quantity: 1 contract(s)
Price: $13.00
Commission: $14.95
Reg Fees: $0.02
Net Amt: $1,285.03
————————————————
Total days in trade = 8
Total commissions = $30
Total profit = $300
————————————————
Net profit = $270 or +27% ROI of $1000

I did not exit the position until after earnings since I did know this stock had a range of up to $280, and if earnings was a surprise this -100pt drop currently at yesterdays $175 stock price could definitely move some points. Now I would consider to use the word luck in this trade just because my option yesterday was at $3 something and I lowered my GTC order since time decay I knew was going to be a big factor in being sold out immediately. It was lucky that the stock went up +44 pts and at the HIGH of my FEB 210 CALL option the call price was $13.30. This means if I had not lowered my call option price to $13 I would have never been sold out immediately in the morning as had I thought in my minds trading plan. The call option price is currently holding at $13 around the $219 stock price. If I would have kept the call option price up 100% at $20 GTC order with the wasted week of time decay and expiration friday even with the stock hitting my goal of $205-220 the call option did not reflect the major in-the-money movement because the call only is good for a remaining two more days.

Sooooo…… I can keep doing is say thank you God. This dude was looking out for me. I’m not only lucky. This call option went up +10 pts so anyone that “gambled” on the high odds likely that First Solar was going to do well because many other solar sector stocks were doing well made out great. I don’t care that I made a profit of 27%. I think now this $1000 trade has been my worst trade even though I made back my money and some profit. Why? You might ask? Well the stock moved down -40 pts, then up +40pts, then down -14pts, then finally up +44 points. As you can see during the 8 days I held on to this option this stock moved a total of 138 pts, and I only traded ONE WAY because I let myself get stock once the stock fell and I did not sell out due to not being able to trade. I basically looked at the major trend of FLSR going up and traded the call going into earnings 2/13 that way. If anything happened ups/down there isn’t much I could do about just keeping in a GTC with my “conviction” that FSLR would move my way, which it did but it didn’t do it as fast as I thought it would. I thought it would move higher faster and then by earnings or day of earnigns lose some points because all the hype and profits were factored already in to the stock price. I’m definitely not a super religious person, but if God is giving me some stress relief this is it!

My next $1000 trade will likely be a less volatile stock. It seems to me the personality of FSLR runs close to AAPL just recently in the past year. Any news highly affects this stock. I need to find a stock I can set up and it will follow through at least technically since most of my trading is off technical charts with fundamental future news that might move a stock. I’m almost certain if I wait to trade until March that a clear trend will be shown even if trading something sideways. One thing I do know is energy stocks should advance higher with oil likely to surpass 100/barrell again.

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6 responses

  1. Congratulations! But you were lucky, because even if you knew it was going up, it could have gone up $30 or $40 rather than $50.

    February 13, 2008 at 8:58 pm

  2. High Plains Trader

    I’ve tried to avoid using the word “hope” myself, and frankly it’s a very difficult thing to do. After Mr. Market is in charge of the trade, high probability or no, we all hope it moves in our favor.

    Congrats.

    February 13, 2008 at 11:13 pm

  3. I can and can’t believe it hit my target I thought it woud go to. Going all the way to $236 my option price for FEB 210 CAll hit $26 the second day meaning it would of hit my first GTC order up 100% at $20 making me $1000 on my $1000 order. But I’m VERY HAPPY being out of the trade +$300 AND still having my $1000 to trade again.

    February 15, 2008 at 8:13 pm

  4. moom – very correct. What if FSLR on earnings only moved + 10 or 20pts then my options would of likely never hit even close to my $13 GTC order. When the market it opened the special number was exactly $13+ with the stock up +30pts.
    I was lucky and I wasn’t. A surprise was rumored and FSLR is down almost -80% from its high so if good earnings did come in realistically it should move up 30-40% like any other big volatile stock.

    One stock I’m VERY curious about is Nutri Systems (NTRI @ $25). If earnings are a surprise I think this stock could easily shoot up 15-20% with a big push on MAR 08 CAll options.

    February 15, 2008 at 8:17 pm

  5. I was looking at the MAR 08 30 Call.. Open interest is high. What other things are you considering on either to go for the position or not?

    February 16, 2008 at 9:40 pm

  6. sleepyoreo,

    I’m planning to trade NTRI if there might be buzz earnings might make the price jump. I’m going to watch it and the charts. I think even a $100 trade justifies the worth of the CALL going through earnings even if I receive an entire loss due to the company having no type of good news for analyst. You could definitely receive a big loss trying to trade NTRI. It’s dangerous so if you don’t have a stomache for moves I suggest not going through its earnings with any amount of money.

    February 16, 2008 at 11:56 pm

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