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The best trade ever

My yesterday’s trade finished today with full profit. I managed to keep the entire premium I collected and the option against GameStop (GME) expired worthless.

Although there were many doubts out there whether GME is a good stock to own or not I trusted my sense and expectations when opening the trade. Of course, I was afraid. There still was a small “what if” back in my head but I tried to believe my intuition as well as my strategy and homework I did before opening the trade.

GME is a dividend stock. It is not a champion, it started paying dividends in 2012 and has only 1 year record of raising it, but still, this gives me a confidence when trading options.

One rule I have is: sell options against stocks you are OK to own and the second rule sell options against dividend paying stocks, which you are OK to own.

GME is one of such stocks. My expectations were correct and I made $109 dollars cash overnight (3.08% overnight gain) selling put contract against this stock. I know, in an absolute numbers, $109 doesn’t look too much, but I didn’t have more available cash to open more contracts (and now I am kind of beating myself for not trusting myself more), and opening more contracts would lower my free cash lower, below my level of confidence. If the stock behaved differently, it could get me in a trouble.

This trade can be marked as my most profitable, prosperous and best trade I ever made and I wish I will be able to spot more similar opportunities in the future.

What about you? What was your best trade ever, which still makes you proud? Comment below or send me an email and I will publish it in a separate article.

Regards and Happy Trading!
 
 





4 responses to “The best trade ever”

  1. Dennis says:

    Congratulations on your trade. It’s the kind of trading I’ve been doing for quite a few years now and it can be very profitable. Be humble and don’t get greedy. Don’t over reach and be happy with what the market willingly provides. Overtime you will become very, very wealthy. Once again, congrats.

    Respectfully,

    Dennis McCain
    http://dennismccain.weebly.com/investing/buy-writ

    • Martin says:

      Dennis, thanks That’s what I am telling myself all the time to not overdo it and be grateful. It is very tempting. But I think, Mr. Market always has a lesson for me to put me back into a humble territory. Thanks for stopping by.

  2. Rob says:

    Hey buddy congrats! I’m new to options trading and I’m still paper trading but I’ll make my first real investments in time for the July monthlys. I’m looking forward to the feeling you must have gotten for having a trade work out just the way you wanted it to.

    • Martin says:

      Hey Rob, it is very delightful feeling. Once you master options and even know how to work with those which go against you and turn your losing trade into a winner, you will be happy and that feeling is great.
      When starting with real cash, start small, do not overdo it, make sure the trade is manageable at all time and once you gain confidence, then you start opening more trades. You will see yourself how great options can be.
      Good luck! And don’t hesitate to ask if you need help.

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