Mini-contract: pulled the trigger

[bigjon]

Hi all,

As i reported just before the site went down, I bought one mini-contract in May silver at a price of $4.42. I didn't have the patience to wait for the lows we have been seeing, at least I hope these prices around $4.35 - $4.38 are the low. We have bounced off the $4.40 region a couple of times previously and I wanted to be sure to at least have one position.

IB's commission was $1.50 going in and will be $1.50 to cover. I hope to buy another contract when and if the price moves up ten cents, another ten cents would see me buying two contracts and following up with closer stops. Does this sound right?

[Libertarian_Guard]

My advice would be to close out your position towards the end of the day, any day in which you can walk away with a 5-10-15% profit. I have lost on many profitable options trades by not closing out positions when I had a chance to take a small profit. You have to keep your finger on the trigger, so it can be pulled.

Always remember, you are a minnow swimming with full grown sharks. So don't lets profits ride, close em out.

[bigjon]

each penny equals ten dollars and right now I'm looking at a fifty dollar loss. I've been toying with the idea of sitting on a bid of $4.35, but don't have the nerve to double up on a losing position. I think that patience is the order of the day.

Thanks for your reply, I would like to add that I have a minnow sized position, with plenty of collateral to back it up.

Everybody else was also a minnow at one time, the thing I've noticed about the commodity markets is like all markets, as long as you know you don't know what you're doing you're fairly safe. the trouble begins when you think you know it all.

I had a cousin who made millions in the seventies soybean market. Then he lost it all and had to mortgage his farm to bail out of his position.

[Libertarian_Guard]

Well now you can see why the pros usually straddle buying both a put and a call at the same time. But with silver this low, how the hell could anyone short it now?

[bigjon]

When silver hit $4.414 I sold my big one contract for a $4.00 loss plus $3.00 commission and put in a bid on a day order for $4.36 with an attached automatic stop at $4.26.

Of course silver now looks poised to breakout of its range and go up.