Closed Crox Calls

Closed rest of positiong in . CQJIX @ $4.50. Total return in 6 weeks =+ 71%

MSTR Update

So my newswire was a little late, but the gap up on MSTR was due to new agreement to provide services for ProcessMAP. We'll see if the markets reaction to this one deal is stronger than the downward technicals.

The Human Factor

This is why there will be no perfect investing machine. MSTR gapped up this morning so our trade needed some adjusting. The technical indicators for a continued downtrend are pretty strong, so today's big jump up, not based on any fundamental news, could be triggered by a lot of things. I moved our entry point down to $3.40 and was able to pick up the contract for $3.20. MSTR has continued up this morning, but I'm willing to let this one play out for a little while. The gap is a good reminder as to why we don't place market orders, or even limit orders while the market is closed. You need to place your orders after the market has opened to be able to adjust to the movements of the market makers. Think of it as a waltz with an 800 lb. gorilla!!

Recommendation for Wednesday 7/3/06

Buy MSTR Put

Buy the Sept 80 Put option for MSTR. The option symbol is .EOUUP. Don't pay more than $4.20 for the contract.

SOLD 1/2 POSITION IN CROCS CALL

Sold 1/2 position in .CQJIX

I had opened a long options position (thru the purchase of a call) on 6/22/06 prior to the launch of this blog. This was a Sept 22.50 Call. I purchased it at $3.20 and sold today for $6.50. One of my blanket money management rules is that once a position doubles, sell half of your position to retain your capitol. Now whatever happens, this is will not be a losing trade (excluding commission costs). In general, if a see a 20-30% drop in the option premium from this doubling, I'll close it to protect my profits, if the premium continues to rise, I'll follow with a trailing stop of that percentage. Always use MENTAL STOPS, don't let the market makers know what you're willing to take.