Not going to lie guys, today I got killed. I took a short term call, expiring tomorrow on CRWD, with a 133 call price. I bought in at the 1.80 strike price and sold today for .35 here’s what you can learn from my mistakes:
never take a short term call. I know this one might seem obvious, but I got greedy. Instead of being the first to get there, before the breakout, I was first to get there before the sell off. I was stuck holding the bag because the option expires tomorrow.
Never bet your money that a stock will break out. As tempting as it is to be the first one to get there, on average you will make a lot more money by waiting for the breakout to be confirmed. This sometimes can even mean waiting for a retest of the previously broken trendline. The idea is to get there during the ensuing rally after the breakout.
do not day trade if you don’t have a high confidence level that the stock will go the direction you think it will. It is also not worth to trade against the trend. Always wait for an indication of which way the price is going.
If you got killed today, comment below with any lessons you might have learned.
Good thing is that you took small risk..never buy short term calls..buy only when you know there is some news coming (earning)...
Isaiahgr3
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@a4ankurbhutani very true! I’m lucky I only took 1 contract otherwise I would have erased my returns for the past three months! I thought, foolishly, I could make more money by getting there before the breakout, but then we saw another wild sell off today. Another lesson in the books!
a4ankurbhutani
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@Isaiahgr3, BTW CRWD is great stock to buy..go long my 1 year target is 200$..2 year tgt is 250-300..But that doesn't mean invest huge as it's a small/midcap stock..