Today I walked away from my ORCL position for a small $50 profit. I say "walked away" because I kind of just gave up on the trade. I set up an August 41/40 put spread back on June 20th. That day ORCL gapped down due to a disappointing earnings report. I took advantage of this dip to set up an aggressive deep in the money bull put spread. Since it was ITM, I picked up a nice credit of $470 on 10 contracts.
My initial thesis was that ORCL would bounce back rather quickly and make it's way back to $42. That hasn't happened, however the stock has tanked either, it just hasn't moved up as strongly as I hoped. Since we're closing in on August expiration AND since the play is STILL in the money I decided to take advantage of this upswing and get out.
Now... full disclosure here... I'm letting my other positions influence this trade. If it weren't for the few stinker positions coming due in August (QQQ call spread, KO put spread, SPY call spread and a potential mess with WFM) I'd still be in the ORCL trade. But the simple fact is I need to manage my potential upcoming risks, AND free up some buying power in the event I need to roll out some stuff. (Obviously today's news with TWTR helps me out as I'm short a $44 September put. Tomorrow's gap up will allow me to close that position, booking a nice gain and opening up a BUNCH of buying power.)
But back to the ORCL move... yes, I should trade them one at a time, and yes I should not allow other trades to bleed into or influence this decision. However, I'm just being open with you guys and letting you know WHY I closed out ORCL today.
For all you folks out there finding this blog for the time, I'm the Option Rider. I play with a wide open hand, for better or for worse! Please feel free to look through my open positions, my winners, AND my losers. Any advice, thoughts, comments or helpful tips are welcomed at firstname.lastname@example.org.