Re: [TheOptionClub.com] Why Did I Lose $$$?

 

I agree, Jack. I started this one way too early. I had a profit target of 20% after commission which was in fact reached on January 29th. It was a $95 profit (on a $350 investment) which I should have taken. If I had 50 or 60 contracts going, I would hope to have the sense to treat it different.

RFH

--- In OptionClub@yahoogroups.com, "Jack" <jack@...> wrote:
>
> Why did you do Feb/Mar? Shouldn't you have started with Jan/Feb?
>
>
>
> What was your profit target?
>
>
>
> I did MCD Feb/Mar calendars and made 80%. J
>
>
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>
> On Sun, Feb 28, 2010 at 11:49 PM, RobertH <robhansen5252@...> wrote:
>
> I've been trying sooo hard to learn calendars, and have gravitated to Dan
> Sheridan's method of calendar adjustment. I opened a position in McDonalds
> on the last day of December with the stock at $62.44, buying 12 of the Mar
> 62.5c and selling the Feb 62.5c for a debit of 0.26. When the stock hit my
> upper break even point on Feb 3rd, I peeled off half of the 62.5 positions
> for a credit of 0.21, and initiated a new 6 call contract position at the 65
> strike which cost me 0.49. So now I have a double calendar, all calls, at
> 62.5 and 65. The profit loss graph looks like a boy scout tent with very
> little sagging in the middle. Well, I couldn't get out of the trade with a
> profit all the way to the day before February expiration even though the
> stock was safely between my strikes. Also, my profit loss graph (at
> expiration) still looked good. I exited the trade on February 18, closing
> the 62.5 spread at 0.31 and the 65 spread at 0.54.
> On paper, I was ahead $30.00 after all that trading, but factor in
> commissions and I lost $78.84. What am I overlooking here? This should
> have been a slam dunk. From what I see, I should have let the short Feb 65
> call expire worthless while the March 65 call shot up from 0.60 to close the
> week at 0.72. (Didn't know that in advance, though). But I didn't think
> anyone holds calendars all the way to expiration.
> Anyone with calendar experience care to take a look at this one. I am
> obsessed with calendars and need some tips.
>
> Thanks,
> RFH
>

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