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I try to use a mental stop of -100% loss on an individual trade. I stuggle though because I have seen prices jump around for no real good reason. Example, an order might come through and a postion goes from -50% to -120% and then back to -50%.
I believe a 100% mental stop loss was one of Cordier's recommendations.
Yes you can get screwy trades in some options. And sometimes screwy settlements. Gold has bad settlements sometimes.
Because some of the options I sell are at such low prices like 0.30 or 0.03 or less and it is so easy to have the premium double or more, I have been more looking at the commodity and deciding if it will go to the point of forcing me to bail on the position. DTE is also considered.
But for the higher priced premiums, 100% is about what I use for them.
The total margin required in my account really jumped today. I haven't checked but I think it is because of CL dropping and I have several puts at 65 and 75.
Ron,
Can you recommend any good sources for the latest on commodity fundamentals and research? I use some of the reports on OX. I like the Hightower report and feeds from the CME group but I am always looking for better analysts.
I bailed on my CL puts when the price went down through $101 but still made $200/contract on average.
Now price appears to have stabalized around $91, I am thinking of re-entering on the pullback as I had previously mentioned. The next move could well be back up with the European embargo on Iranian oil starting on 1st July which is likely to heighten geopolitical tension in the area. The downside is further Eurozone fears of contagion and recession which could drag oil prices down further.
I am thinking of 65 and/or 70 strikes which look good for 193/mth and 350/mth respectively.
There aren't many sources for good info. I read the Dow Jones stuff on OX to get a feel for current thoughts on commodities. I check Hightower occasionally. I check what Cordier is saying.
I do google searches (news) for quotes by these knowledgeable analysts. John Kemp. Tim Evans. Oliver Jakob.
I ignore everything said by Phil Flynn, John Kilduff & Shawn Hackett. They don't know what they are talking about.