Tuesday, June 19, 2012

PCLN - Kirby

PCLN opened a bit lower yesterday at 656.32, and immediately punched into the kirby above 660. This time price action worked like a charm as PCLN never looked back closing at 673.50 + 14.09. let's take a look at how the 3 option trades performed.

 So all three performed well with the straigth call leading the pack. The velocity of the move is what caused the underperformance of each of the spreads. If that contines those effects will intensify, however any lessening of the velocity, and the passage of time will help the call spreads.

In the interests of full disclosure, my intention was to enter the 3rd trade, the ratio. When I saw PCLN trading below 660 just after the open I thought great, but AAPL grabbed my attention and when I looked back at PCLN it was 664... it seemed like the blink of an eye (the power of the Kirby). PCLN never fell back toward 660, and I DID NOT enter any of these trades, though I obviously wish I did, especially still have my put butterfly on.

If you'd like to follow along, let me know and I will continue to post results of these trades and how I wouls have traded them. I think one can learn a lot by watching each trade wind its way toward either expiration or close out.

This is not investment advice. Raymond (Randy) Reis is not a registered investment advisor. Under no circumstances should any content from this website or Twitter be used or interpreted as a recommendation for any investment or trading approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. Mr. Reis may have numerous positions within the market at any given time that are not disclosed of at the time of publication. All opinions expressed by Mr. Reis are subject to change without notice, and you should always obtain current information and perform the appropriate due diligence before making any investment or trading decision.
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