Trading splits

So MA split. So I bought yesterday when I saw MA going down and held over night. Gotta leave my computer and assist one of my employees who is stuck with a problem. So I sold a few minutes ago...BTW.... Thank you GW.

Looking forward to Feb to get out of this Jan mess!

MASTERCARD
01/24/2014 O STC MA JanWk4 82.75 Put 5 $1.80 $14.95 $884.85
01/23/2014 O BTO MA JanWk4 82.75 Put 5 $0.55 $14.95 ($290.13) 594.72
Total Realized Gain/Loss for MA $594.72
Total Realized Gain/Loss $594.72

Hi Darcy,

I'm curious to learn about your thought process for "choosing" trades. Out of your trading plan and and expected gains/trades etc...Why did you choose to do this trade?

I ask because GW says that the pullback often experienced after a split is not "necessarily" the idea portion of a split to trade.

Thanks in advance.

I knew that MA would move after the split. Which way depended all on how the moving averages broke down.

When those itsy bitsy candles started to show up on the 55 I knew...just knew that some folks were cashing in on the 10 for 1 split. I expected some sell off when MA split. Why? If a person had 70 shares before the split they would have 700 after it split. It only made sense to sell off some and hold some since we know MA will most likely rise in price after this terrific split. Heck I bought 20 shares right after I heard about the split. Now I have 200 shares and can do a W/O with it. (That's how I thought)

About the trade.....When those moving averages started to tighten and the candles went below them I knew it was a PUT. Look at 34 and 21. Remember I expected some folks to take advange of that split.

My regret is I didn't stay in this trade. Look at the 55 chart at the ride down the BB MA took. I am still HIS but brother what a move!

Now about a pullback...Look at it like this...a pullback can also be thought of as a PEAK or SLAM. I am not saying that you follow those rules for a PEAK or a SLAM but a pullback can be several dollars. You simply have to be able to watch the chart.



Edited 1 time(s). Last edit at 01/28/2014 08:16PM by Darcy2.