Let's try an assignment on exits today. Here is a look at none other than LVS. Take a look at the price action over the last few days and where we are today....

Assume that you took this trade on the breakout Wednesday. Also assume that you bought the December 85 calls at $1.50 per contract, and as of right now they are trading at $5.80 per contract. What would you do here?

Actually, I know exactly what you would do here, but I want all of you to send comments about what action you would take and why? Exits are the best conversation piece.

Let the winner run! It would be easy to take profits right now, but the price action is not revealing any weakness. I would raise my stop loss to approx. 85.50...about 1/2 of Friday's long candlestick. If someone was willing to sacrifice a little more profit to stay in the trade, a new stop loss under Friday's low could keep the trade going while LVS consolidates.

Jeff....I think at this point with the overall markets at a resistance level I would take my profits (287%) and look to re-enter on a support bounce. I know it probably has more upside but if things fail at this resistance level you would give up a bunch.

Doug

Jeff;

With a target price of 95-96 I would let my profits run. I might raise my stop but not very much. One days rest does not make for a reason to sell.

Bagels

I think there gotta be a correction after those drastic moves. Ideally I will tight my stop loss and let the winners run. However, my feeling told me that this stock will take some time to find its new support/resistance level. Until then, I will take the profit and wait for the next entry point.

I think it's time to take profits, at least on a portion of the position. Holding the entire position at this point without taking any profits would border on being greedy. The stock has punched through its MA envelope (30 day / 15%), which it doesn't stay outside of for very long, and it's unlikely to go much higher without a pullback. Maybe sell half and place a stop below today's low if you anticipate further upside. Nice trade, but book some profits.

Andrew

Well, this one's easy, as I wanted to get into it last Tuesday, but was moving all my money to a new broker and couldn't get the account open until Thursday. I WOULD HAVE sold Friday afternoon, as it has blasted through the top end of the channel it had formed by such a wide margin that retracement to it's support end of the channel seems inevitable. I hope for all of you that I'm wrong. Meanwhile, AAPL just keeps on plugging along beautifully.
Chris

Chris...

You would have bought before the breakout? At resistance? Did you know ahead of time about the news that pushed them through resistance?

Me too.

So far nothing on the chart is telling me to sell. Price is KING....so let it run. I would place a stop at $3 in case any intra day news happened to hit the stock. As a risk/reward trader I want to make sure I keep my 2 for 1 profit.
Jeff, thank you for stopping in at the 4 day last week. It was a privilege to meet you.
Jamie

I would like to give it some room to run for the day but would get out if intraday it went below 1/2 the previous day's candle, i.e. 85.24 and it would have to close above today's low of 86.45 or I would get out.

Volume is starting to shrink though its still very high historically. MACD is at an all time high. The stock rarely exceeds 20% over the 30 day avg and its about at 16% over now. The option is slightly above ATM.

Any retracement would suck a lot of value out of this option rapidly. I would sell in expectation of a retrace and bounce. And go skipping fra la la to the bank with a 286% winner in 3 days.

MikeH

Honestly,

I would sell. The option contract price has increased by 500% and the price movement today indicates some indecision as to where the stock will go from here. A gain is not a gain until you close your position. It's just a realized gain, so let's not be greedy. Enjoy the profits, re-evaluate the stock, and re-enter if the stock provides a good entry point.

- Corey

take your profits. a re-test should occur eventually, and who's not happy with that percentage return?

love it and take it.

If I would have entered this trade on the breakout Wednesday, my rules would have made me pick my target before entering the trade. My target would have been $86, therefore I would have exited when it hit $86. My rules require that I take my profits when my target is hit. I would then look for another opportunity to place another trade.

Jeff,

I sold half my contracts at end of day today and set a stop for tomorrow at the low of today. I have more than met my original goals and now await a few crumbs or even the dessert if it goes higher tomorrow. Was a awesome ride for sure!!! Can not wait until tomorrow. Thanks for having this wonderful forum to learn and share!!!

Regards,
Randy

I didn't get into this trade until Friday morning. I closed out of the trade this morning with a 48% profit because my stop loss was reached as I had raised it to capture a certain percentage of my profits (part of my trading rules). I just noticed the volume was way down today so actually happy I got out.

I see an ascending triangle b/o with a target around 96.I see no reason to exit at this point.I would look at an exit on close below midpoint on Fridays candle. I am trading the Jan. 85 Call for more time to achieve the target.

Great post Jeff! This is an excellent example.
Honestly, I'm nost sure what I'd do. On the one hand there are some sweet profits that could be locked in. On the other hand I don't see price weakness materializing yet.
-Mike

Initially....if I would have entered the trade on Wednesday, my target would proably have been $86...The huge moves in the past 3 days with extremely high volume would have slightly altered my exit....I would still have exited most of my position at my target but I would have left a small
position to continue running with the stock....
I would want to take profits....
but leave a small amount on the table...maybe 20%.....and possibly add to my position if the stock continues to climb up...

This is a great exercise for all of us....It's one thing to recognize a great stock...and a breakout....it's another thing to know when to exit while maximizing profits.....
Danuta

Bulls make money.......

Bears make money.......

Pigs get SLAUGHTERED.

Enough said.

Joe K.

Before INVESTools:



It's over! I have to sell before I lose everything. SELL, SELL, SELL! Wait, what if it goes up after I sell? Somebody knows something I don't. They are trying to shake me out. What's that pain in my chest? What if I die before I sell? I'll lose everything! I need a doctor! Wait, if I sell there won't be this pressure and life will be good. Sell! ... Darn!



Since INVESTools:



Looks like there might be hesitation. Volume looks good. Possibly an Evening Star forming. Most of the decline was in the morning with a recovery in the afternoon. Smart buyers are still buying. Veteran's Day was on Saturday and Monday is a holiday for some schools. Probably a lot of people taking a 3-day weekend. I think I'll move my stop (mental) up mid-way into yesterday's gain to catch the possible Evening Star.



Thanks for your insight.



Duane

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  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
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