Friday, March 24, 2006

Our Plan for Next Week

An Option Strategy Example 3: QQQQ

Another dithering day! At the end, we backed to square one.

From the table, we should feel how volatile the option trading is. From $41.30 to $41.50, the price changed $0.20 or 0.48%; but our option holding changed from $400 to $510 at 27.5%!

Next week is the crucial week; we need to close our position at least in half; we can hold the rest half for a possible better price.

Most likely on Monday or Tuesday, the QQQQ will reach $41.90. Once QQQQDP reached $1.00, we should sell 4 of the 6 contract. You can set up a limit order ASAP. Regardless how optimistic you will be, you should cash your gain and get your principle back.

The market will be at a relatively high level soon. We should pay close attention on the possible turn back. Therefore, protect your investment is more important than pursuing a higher return.


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