Hey Guys,
The market saw a rebound overnight, which is encouraging. The S&P 500 is around 7,660 right now, which is back where it was on Wednesday.
There haven't been any new trades yet today, but I had a boatload of positions get closed since my last email
I had some positions reach profit targets, like my stock position for T and my option positions for BIIB and T. But I also got hit hard by some positions that took losses: namely CAG. I had two CAG positions in both my stock and option accounts, and all four of them took losses. And with the option trades, in particular, those took a toll.
One of the CAG option positions is so low in value right now that I actually haven't been able to sell it yet. I have a sell limit order for one penny open for it, and it hasn't been filled yet. It might expire worthless. I never intend to hold a position into expiration, but ultimately, if there is no one willing to buy it even for a penny, all I can do is leave this sell order open until expiration and then let it expire. If an option expires worthless, it's a quiet process (no stock is assigned to my account in that scenario). It simply disappears from my account holdings.
My options account had been hot for several weeks, but this week was decidedly not hot. It's like taking a punch. The big challenge is that even when trading with an edge, there will be strings of losing trades at times. It can be hard to keep trading after taking a punch, especially since there is real risk involved, but I'll continue to stick to the trading rules like glue in order to stay in lockstep with the backtested approach.
If you have any questions, just reply directly to this email.
Eric