I mentioned earlier how people need to keep a check on their greed...well, FEAR is another emotion that needs to be reined in every one in a while.
I was looking over my notes and emails and back on the 29th of November I recommended an option to a buddy of mine that wanted me to "give him a good one, Santa needs some cash!"....well, I recommended ALK Dec18 75 PUT @ $2.25 or better. He got in at $2.35 the next day. it dropped and did well a couple of days, and then gapped up and went back up to almost what the stock was trading at when he got in. I told him that would be fine, that he has plenty of time left, but he got spooked and got out (FEAR). The stock dropped big time and eight days later the bid price was $14.90 at the open! I had talked him in to 25 contracts and that was over twice what he normally trades, so he was scared of losing money..... but that caused him to miss almost $32K in profit.
Sometimes a trade has to 'breathe', and if the reason that the trade was good to begin with really hasn't changed, don't let your fear cause you to get out of a good trade. There is a big difference between caution and fear.....
I was looking over my notes and emails and back on the 29th of November I recommended an option to a buddy of mine that wanted me to "give him a good one, Santa needs some cash!"....well, I recommended ALK Dec18 75 PUT @ $2.25 or better. He got in at $2.35 the next day. it dropped and did well a couple of days, and then gapped up and went back up to almost what the stock was trading at when he got in. I told him that would be fine, that he has plenty of time left, but he got spooked and got out (FEAR). The stock dropped big time and eight days later the bid price was $14.90 at the open! I had talked him in to 25 contracts and that was over twice what he normally trades, so he was scared of losing money..... but that caused him to miss almost $32K in profit.
Sometimes a trade has to 'breathe', and if the reason that the trade was good to begin with really hasn't changed, don't let your fear cause you to get out of a good trade. There is a big difference between caution and fear.....