Bought to Open 5 contracts of MDR Aug 22 2009 $19.00 Call at 1.05
Trade
Bought MDR Aug 19 calls as an infrastructure and energy play, short term. Earnings come out 8-10. I'm posting this trade note per a request, by the way. As with HLX, I've been looking for quality that's been beat down, and looking for upside surprises. This also is a short term play, I won't be rolling over to the next expiration cycle.
I was asked how I value an option. The marketplace does that - so with tight bid/ask spreads the marketplace really determines true value. Wide spreads in illiquid markets scare the heck out of me, so there I almost always use a limit order. Market orders to buy in or exit a position usually happen in an avalanche or a feeding frenzy type of market, and I always kick myself for buying/selling that way! You can use the TradeKing "Option Calculator" in "Tools" to find a fair value for an option also. -John
Trade ticket:
| MDR Aug 22 2009 $19.00 Call 6.20 +1.36 (+28.1%) | |
|---|---|
| Transaction: | Bought to Open |
| Security: | MDR Aug 22 2009 $19.00 Call |
| Quantity: | 5 contracts |
| Price: | $1.05 |
| Value: | $525.00 |
| Target price: | $0.00 |
Trade Note:
Bought MDR Aug 19 calls as an infrastructure and energy play, short term. Earnings come out 8-10. I'm posting this trade note per a request, by the way. As with HLX, I've been looking for quality that's been beat down, and looking for upside surprises. This also is a short term play, I won't be rolling over to the next expiration cycle.
I was asked how I value an option. The marketplace does that - so with tight bid/ask spreads the marketplace really determines true value. Wide spreads in illiquid markets scare the heck out of me, so there I almost always use a limit order. Market orders to buy in or exit a position usually happen in an avalanche or a feeding frenzy type of market, and I always kick myself for buying/selling that way! You can use the TradeKing "Option Calculator" in "Tools" to find a fair value for an option also. -John
Posted 6 days after the trade
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