Not going to lie guys, today I got killed. I took a short term call, expiring tomorrow on CRWD, with a 133 call price. I bought in at the 1.80 strike price and sold today for .35 here’s what you can learn from my mistakes:
- never take a short term call. I know this one might seem obvious, but I got greedy. Instead of being the first to get there, before the breakout, I was first to get there before the sell off. I was stuck holding the bag because the option expires tomorrow.
- Never bet your money that a stock will break out. As tempting as it is to be the first one to get there, on average you will make a lot more money by waiting for the breakout to be confirmed. This sometimes can even mean waiting for a retest of the previously broken trendline. The idea is to get there during the ensuing rally after the breakout.
- do not day trade if you don’t have a high confidence level that the stock will go the direction you think it will. It is also not worth to trade against the trend. Always wait for an indication of which way the price is going.
