This morning BTI ran up and hit the profit target. That makes it now 15 winners in a row. This type of winning streak is rare.
And fun!
I also bought a couple new stock positions as well. I scooped up CAH and MCK this morning.
Tomorrow is the expiration date for 4 options trades that I'm holding. So if they don't hit the profit target by tomorrow, I'll be closing those positions in the morning.
I want to point out something important about closing my options positions. In my video tutorials, I talk about the possibility of getting out somewhere between the bid and the ask (either manually or with a pre-set conditional order).
But sometimes a given option might not be particularly liquid, and the bid and ask can be pretty wonky (like VERY far away from each other and not reflective of the true value of the option). So if you try to exit at a price "in the middle" of bid and ask, you could be selling yourself noticeably short of what the potential value of the option is.
So I wanted to offer another idea to consider, which is to sell for a price that reflects at least the intrinsic value of the option. Ultimately, that's what I'm trying to get out of any given option when I sell it: the intrinsic value. A limit order could be used to accomplish this.
What is the intrinsic value? If you take the current price of the stock, and subtract the strike price of the option, that's the intrinsic value. If it's negative, it has no intrinsic value, and then I sell for anything I can get. But if it's a positive number, then I want to make sure that when I sell it, I get at least the intrinsic value out of it. Most times, there is a little extra value on top of the intrinsic value that can be captured in a sale, but if nothing else, I want that intrinsic value.
So for those who are following me on my options trades or learning my options approach, you might want to consider that for your options exits. I'll make a video soon to show examples of me doing it. As always, the choice is ultimately yours for how to exit a position.