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In my opinion, Cordier's 200% rule does not work when selling options that are very far out of the money simply because the premium can double too easily. In your case 0.1 doubled to 0.2. You will find yourself exiting almost all of your far out of the money positions by following this rule. And then a few days/weeks later, many of these same positions will expire worthless. Can be very frustrating.
I would suggest scrolling back in this thread and read what Ron99 wrote about keeping 66% of his account in cash to be able to ride out the volatility.
I sold some May CL 75 puts that has been taking some heat the past several sessions but since I have a decent cash reserve, I will stay with them. Plus I can take a little bit of comfort that with this sell off, I am still $18 out of the money. I will monitor closely though.
And CL losing $8 in two sessions is not all that big of a deal if you have been trading for awhile, it happens!
Some of the participants in this thread like to sell their options some 60 days to expiration. I preffer to sell them beyond 90 days, this way any fluctuation in the price has less effect than in the closer dates. Usually, I donīt wait until expiration, I buy them back at 50% of profit plus commissions. IN average, it only takes 20 days to reach that point
As a rule, if I ever enter into a trade "by accident", I get out as quickly as I can without panicking. After reading Nick Leeson's "Rogue Trader" book, I never try to ride out an error.
Very large traders, hedge funds, recognizing the market is about to turn and they need to start getting out sooner to be out before the change in direction.
But that is just an educated guess.
For CL futures only, hedge funds peaked net long in the spring on 4/6/10, 3/8/11, and 2/28/12. Earlier each year.