Wednesday, January 17, 2007

Options Trade: MasterCard Inc (MA)

Feels very good to bounce back with a win.

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1. Why did I take this trade?
Because MA was breaking out of its past 4-day trading range

2. What was the initial stop?
Iinitial stop was a break below 105.9. I was debating whether to sell for a loss when MA broke below 105.9 in the afternoon. But then MA bounced back up to 106 very shortly afterwards.

3. Why did you exit where you did?
When I showed my wife that we had recovered yesterday's losses and then some, she said, "don't go and screw up a good thing!" That was her way of telling me to sell - who am I to disagree with my boss ?
As mentioned in the chart, my entry point was not ideal (ie. higher risk), and my exit did not have a valid technical reason (selling because I want to protect profits is a reason, but not a technical reason IMO). It was only in retrospect that I found out that I sold pretty much near the top.

4. Is there anything you would do differently?
Probably the safest entry of all was when support @104.6 was confirmed very early in the morning session. Unfortunately, I did not take a look at the daily chart at the time I was considering entering.
But any profitable options trade is good enough in my books.

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