Here is a good one for you. Iâ€™m laughing now.
I was going to enter Glaxo Smith Klein today. The set up looked good for a long trade.
I was going to get in at 3 levels. The plan, Buy around 57, and marry it with a 57.5 put. Profit, Loss, and time exits set.
At 9:08am I was filled on a 100 shares @ 57.16. I was testing the waters, â€œWhen the stock comes back up, I will put the option on for less $$.â€ That said, I never made the opportunity for insurance. I didnâ€™t have my put protection in place (bad move, lesson learned). The price immediately went down to 57.02, then moved back up to 57.11.
Then about 7 minutes later
9:16am â€“ The NEW ENGLAND JOURNAL OF MEDICINE announces GSK leading drug â€œAVANDIA may raise heart attack risk, DEATH RISK!!!â€
The stock falls like a stone. As soon as I see this newsflash on my TOS platform, I sell. Market order, get me OUT!!! 56.34
9:26am – After I get my senses, I think holy crap, there is opportunity here. What are the June 52.5 puts selling for? I put my order in trying to shave the price,.20 I miss, .25, I miss, .30 I mis. Hell, Market order, .40 fill 10 contracts. What does the option price do??? Comes back. .35, .30â€¦.. shoooootttt.
Hang on I tell myself, This is Death-risk for goodness sake, your fine. Well then the price finally headed lower. I check technical support levels. 53.75 is major support. I do my best job of option price estimation (again the TOS platform rules). I choose .80 to sell.
10:04am – As it approaches that level, I thinkâ€¦ hmmm if it goes through this level, lights out. This stock is going down!!! â€œIâ€™m going to Sizzler, Iâ€™m going to Sizzler.â€ So, I pull my order. .85 prints for the option. â€œYeah, baby. Itâ€™s going to do itâ€ What happens? Support indeed acts as support. The stock price heads back up. Now Iâ€™m thinkinâ€™, stick to you plan you monkey. You may deserve to loose money on this mishap.
10:07am – I put my order back in for .80. A few minutes later, it fills, Iâ€™m out. Well, there is no sizzler today, but I am going to make a portabello mushroom sandwich for lunch.
Until next time,
Jon from Breck
May 21, 2007 – GSK trade
What happens when the stock you have long KILLS people?