GM 9/20/2016 Look Back Trade

GM – 09/20/16

When I entered this trade GM appeared to be in a range from $30.00 to $31.25 with low implied volatility. On 9/23 I rolled my 9WK4 to a 9WK5 position because GM had broken out above my range to $32.29. By 9/30 it had come down some but was still to high so I rolled the 9WK5 short to 10WK1.

During that next week it shot up again to $32.50 which was hurting my position. I rolled my 10WK1 to a 10WK2 trying to manage this trade. On 10/14 the price had dropped to $31.88 and I could have closed the position for about a $180.00 loss. That would have probably been the smart move since there appeared to be a lot of support at $31.50. However, I elected to roll again. Rolled my 10WK2 to 10WK3.

On 10/21 I started the day by placing a close at break even, hoping to close the trade. After lunch I had not filled so decided to stay in and roll my 10WK3 to a 10WK4 position. By 10/28 with GE trading at $31.69 I could have closed for about a $200.00 loss. Instead I decided to roll again. Rolled my 10WK4 to 11WK1.

On 10/31 I could have closed at a loss of $160.00 with GM at $31.51. I held. On 11/1 my loss looked like about $80.00 with GM at $31.41. On 11/2 GM was at $31.52 and I was looking at a $50.00 loss.

On 11/3 my GTC close was hit giving me a small profit on the trade. This was a lot of work for a relatively small gain. Probably I should have closed for a loss earlier but I held on, confident (or praying) my initial analysis of GM was correct and it would return to its range.

It did and I was able to get out despite over trading for a small profit. My max risk on this trade ended up being $940.00 on 9/23. I ended up with a $260.00 profit or 27.7% on that risk over 44 days. I know that sounds pretty good, but I had to work for this one and the stock had to fall back in line with my predicted range after the break out.

Date

Symb

Action

Exp

Strike

Price

Cont

Type

Cost

Balance

09/20/16

GM

STO

9WK4

$31.00

-$0.67

10

Call

-$670.00

-$670.00

09/20/16

GM

BTO

NOV16

$31.00

$1.63

10

Call

$1,630.00

$960.00

09/23/16

GM

BTC

9WK4

$31.00

$1.29

10

Call

$1,290.00

$2,250.00

09/23/16

GM

STO

9WK5

$31.00

-$1.31

10

Call

-$1,310.00

$940.00

09/30/16

GM

BTC

9WK5

$31.00

$0.72

10

Call

$720.00

$1,660.00

09/30/16

GM

STO

10WK1

$31.00

-$0.86

10

Call

-$860.00

-$800.00

10/07/16

GM

BTC

10WK1

$31.00

$1.24

10

Call

$1,240.00

$2,040.00

10/07/16

GM

STO

10WK2

$31.00

-$1.29

10

Call

-$1,290.00

-$750.00

10/14/16

GM

BTC

10WK2

$31.00

$0.92

10

Call

$920.00

$1,670.00

10/14/16

GM

STO

10WK3

$31.00

-$1.01

10

Call

-$1,010.00

$660.00

10/21/16

GM

BTC

10WK3

$31.00

$1.04

10

Call

$1,040.00

$1,700.00

10/21/16

GM

STO

10WK4

$31.00

-$1.26

10

Call

-$1,260.00

$440.00

10/28/16

GM

BTC

10WK4

$31.00

$0.43

10

Call

$430.00

$870.00

10/28/16

GM

STO

11WK1

$31.00

-$0.64

10

Call

-$640.00

$230.00

11/03/16

GM

BTC

11WK1

$31.00

$0.35

10

Call

$350.00

$580.00

11/03/16

GM

STC

NOV16

$31.00

-$0.84

10

Call

-$840.00

-$260.00

Profit:

$260.00

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