JEC
I also played my first Call in a long time on JEC. The reason for a call was taking advantage of a bounce, as well as the anticipated run-up to a 2 for 1 split on 3/15. I got in a March $95 for $1.80, and I expect the stock to reach over $100 based on my supporting trend line. Should everything go as planned, the option should be worth at least $5 when the stock hits the $100 target. That is better than a 3-1 Reward/Risk ratio, which is solid.
I did make a "mistake" possibly. The March $90 had a 4-1 Reward/Risk ratio, but it cost $4.30. My reasoning for taking the $95 was that in case of catastrophy, I would only be out $1.80 on the $95, but $4.30 on the $90. However, as my coach Sam S. pointed out, that based on position sizing (Portfolio Heat), the losses would still be about the same because I would have had a smaller position size on the $90. So note to self, ALWAYS take the better Reward/Risk play. We'll wait and see how this plays out.
You'll notice I have marked my "Time Stop" and my "Target Price" on the chart, and I have my "Hard Stop" set at $0.90 and my "Mental Stop" set at 1% below recent support since in essence this is a short term "swing trade".
One That Got Away
PCAR - Which I mentioned a few days ago took an early bounce just like CLF just did.
Happy Trading.
