Trailing Stops Work Best
When News Comes "Out-Of-Nowhere"
It’s a holiday week but news from unknown sources has a way of disrupting the norm as we know it. There’s been an interesting discussion taking place on LinkedIn over the recent past regarding the use of stops.
I do not trade often but when circumstances arise I usually “go against the flow” and buy when “they” sell and sell when “they” buy. It’s a learned trait and one I’ve spoken about often.
When those actions result in gains of 25% or more I like to protect short term profits especially in options that stretch out for months at a time. That opportunity was given to me with respect to my 2024 WTI July 85 calls so I did the only thing I know how to do; I placed a GTC order to protect a good decision.
Angola Announces Exit From OPEC
It was a nice 16 year partnership while it lasted but everything has to come to an end. Angola announced it’s leaving OPEC amid a fractious dispute over the oil production quotas. Guess what happened to oil futures? They dropped.
Options did too but like every option trade one makes, or attempts to make, “results” are not as indicative as one would like as traders are dealing with market makers who like to make a living. I did not get a complete “fill” on my order but I preserved profit on about 10% of my total position. It’s a July contract folks and one I will happily hang on to for quite some time but when the opportunity to protect a profit exists I’ll take it besides, Angola is not a major player. GDP coming in a little light didn’t help either so as we enter the true holiday weekend I’ll sit, wait, watch and listen. You should too as news does come “out-of-nowhere”.
It’s a holiday week for all of us. Next week is as well and that means that moves, in most everything, will be exaggerated. Traders, at least more savvy, experienced ones are taking some well deserved time off with family. That doesn’t mean the world just stops so keep both of your eyes and ears open. I know I will.
Tis the season of joy and giving back. Andy Williams had it right with his rendition of “Happy Holidays / The Holiday Season” and he was clear. It’s a busy time down here in Texas and I’m sure the same is true for everyone. Enjoy your time with family, give thanks to what’s brought you here and get ready for 2024. My best to all of you at this time of year. May your holidays be bright and your new year be happy and healthy.