As I mentioned in my last post, I decided to dip my toes in the option trading market. I did some searching, put some numbers into a homemade spreadsheet, and decided that a call on MSFT was pretty appealing. Specifically, it was an option to buy MSFT at $45.50 a share.
I quickly snatched it up and started the process of watching the price fluctuate. I didn’t give myself a lot of time here, which may have been a mistake. It was going to expire in less than a week, and the price of the option went down every day after I bought it. Isn’t this just the way of things? It feels like whatever trade I attempt to make, the market moves against me.
Then, one day before the option was going to expire, the market had a banner day. All stocks seemed to rise and the DOW closed at a new high. I sold my option immediately and made a 36% return on my money.
Haha, and Hell yeah! I am a market timing maven. Look out world, there is a new player in town.
There was a little voice in my head, though, whispering “did you sell too soon?”
Oh Greed, how are you today? Unfortunately, greed, the market is now closed so I can’t do anything about that. Let’s just take our winnings home and call it a night.
The market dropped the next day. Boo Yeah! I got out when the getting was good.
What a great way to invest. I did some research, placed a good bet, and harvested at the right time. This is fun, and I should do this again.
In my next post, I attempt to sail the seven seas with an option position in Royal Caribbean Cruises (RCL). Will it be smooth sailing or abandon ship?