DDD... taking me to school today

Well there's a reason I like to stick with high-quality, dividend paying, slow moving stocks - that's because technically they pretty much stay in a well-defined trading pattern. Which makes it easier for me to pick support and resistance levels.

That's not the case with the high-beta, high-flying, momentum stocks - especially these days! Picking support levels is a JOKE! Yet I'm still trying to do it. Why?

Because I'm greedy, stupid and arrogant. 

What's bringing out all this self-hatred? 


Back on April 3rd I had the bright idea to sell a put and pocket some premium. I thought for sure the stock would find a bottom soon. I mean, after all the dang thing had just been at nearly $100, and at the time I put on the trade the stock was around $58. I StO the April $55 put, collecting $103 of premium. Man, I sure was pleased with myself... until the bottom fell out. Oh yeah, it had a long way yet to fall!

Well obviously I got assigned 100 shares averaged in @ 53.97, which I was fine with for the most part. I have learned to NEVER sell puts on stock you don't want to own. 

But today DDD is getting SMOKED after reporting this morning. So here I am, damn near $1,000 underwater (on paper) and stuck holding for a while. 

So my hope is that you folks out there can learn from my mistakes, and more importantly, learn the most valuable lesson there is...