Irrationally mad decision making to obtain the American Dream.

No internet!!! – Bought NTRI APR 20 CALLS after earnings, whoops.

Okay I’ve had no internet on the boat since patroling back from Alaska to Hawaii so far. I’m finally able to login and post somethings I’ve been meaning to get around to.

Bought Nutri System after its stock dropped -25% @ $17. Now I consider it a mistake. I was thinking, “well what if it drops again, and again”, but it was pushing through the bollinger bands so I was convinced it would spring back up and move up from being sold off so quickly. Wrong again. Buying Puts on it (you know the trend is your friend) would have been the correct thing to do. I still own the CALLS because I could not sell out. The trade isn’t over yet. I highly likely even with a poor outlook the company still creates continual growth and with one positive news piece the stock with its sold off part should rise which my goal is to $18-19 before dropping again in which I would be sold out. NTRI has done this many times with hard drops. It creates a small peak before dropping lots more and that is what I’m going after. A hard trade? Yes, I picked a very difficult trade.

Here’s my order and it’s logged in my $1000 trade log:

Completed on 2/20/2008 12:21:41 PM (ET):

Symbol: .NSIDD
Description: NTRI APR 20 Call
Stock: NTRI at 17.00
Action: Bought To Open
Quantity: 2 contract(s)
Price: $0.85
Commission: $14.95
Reg Fees: $0.00
Net Amt: $184.95

As for my SWN MAR 55 PUT’s I’ve found surprises with the energy industry and again I’m trying to break its trend! What is wrong with my thinking! I find myself constantly trying to trade against the trend when I see a trade. I don’t understand how at the time I feel convinced these are my best trades when they are really sour entry points specifically for these types of trades. The energy industry is still high right now. On weekly charts its at the top and what I see most important is “spinner candles” forming near the top and this usually indicates a change in trend. I could be wrong. It seems to me 100% that after its big run up from $49 to $64 it would fall some, but another factor a BIG factor I have to keep in mind is that it has earnings Feb 29th. Shit. Realistically this stock should profit off all these high prices and move higher just like RIG did. So knowing this knowledge even if I have a sharp loss if I can keep only $100 because it hasn’t fallen into earnings or just has not fallen with news or oil problems I 1000% should NOT go through its earnings.

My NTRI calls have until the end of April so I actually feel pretty safe although I don’t want to be in a trade more than 2 weeks.

Advertisements

One response

  1. Good post on differences between investing and trading:

    http://www.peridotcapitalist.com/2008/03/differentiating-between-trading-and.html

    March 6, 2008 at 12:52 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s