After a
successful strangle back in August I stated, "
Of course, there is no guarantee that past
performance will be indicative of future results as the legal baboons often
say. Next time, maybe I'll place a losing trade using the same strategy to show
that the downside isn't usually too steep, hence the stress free description of
this trade.
Sure enough
this last trade filled the bill as a loser but the small loss is typical.
Looking back at the combined price of the call and put we
have this...
Friday (at the open) .70
Monday (at close) .77
Tuesday (at close) .74
Wednesday (at close) .63
Thursday (@3:30 pm) .68
So the trade cost us $70 for 1 call and 1 put, and just
before the close on Thursday, prior to the earning announcement, the price settled on $68. In hindsight I could have sold
on Monday and made $7 but the plan was to hold for a more robust gain. Making 10% in one day just isn't good enough.
This strategy has had a 55%-60% success rate so it's no
surprise that I had to give back a little this time. The election
"twist" in this case turned the trade into a loser.
