The Market Maker is NOT My Friend

Ugh! I bought puts on MA yesterday for 11.50 and decided to hold them overnight due to yesterday afternoon's news regarding several of the biggest retailers filing suit against Visa and Mastercard. My thoughts were that based on the strong down trend that was already in place, as well as, the new bad news MA would open lower this morning allowing me to get out with a quick profit.

Sure enough, MA gapped down on the open and proceeded to fall more than $7 from yesterday's close. I already had a GTC sell order in; and by all calculations, my options should have seen at least $3 of that large drop.

However, the market maker never even moved the option prices until about 15 minutes after the market opened and the stock was already on a very strong bounce back. I sold quickly for 11.70 -- only realizing a 0.20 gain on my option when it should have been more.

I know, I know, I know... I probably shouldn't have held it overnight; but it seemed like a worth-while, calculated risk. For the moment, the market maker and I are not friends.

I know how you feel. I bought puts on CAM on Wed. off of the 233 chart, stock price around $64. The stock has dropped since then with a low of around $61.87. The option price has only moved 0.20. Uggghh!!!

ugh...that's awful. Assuming you purchased the ITM 65 Puts, you should have seen between 0.55 and 0.60 rise in your put price.

I learned a very valuable lesson in regards to this: Trade with the DOW and NAS. Neither have commited to the downside on the weekly/daily time frames. Market Maker has not choice but to pay you if you trade with the general direction.

Market has been basically flat. I did make $$ on WLT earlier this week and then on MA. But most of my time has been spent watching paint dry...boring!!!

Now next week I am expecting some moves based on the market history I have collected since 2004.