Comments on: Got Milk? How Priceline Milked Me

By: Jeff W

Jeff W — Fri, 19 Feb 2010 11:50:00 +0000

I have used straddles in the past for PCLN earnings – and those worked out well. I have heard from more than 1 professional to just get out of current month holdings the week before expiration, or roll them out. That’s what I did with every other position I had except PCLN. It was greed and nothing else. Shame on me!nnu25c4 Jeff u25ba

By: Jeff W

Jeff W — Fri, 19 Feb 2010 11:45:00 +0000

Speaking of TOS and mid-points… I have found that when volume is down and I am selling, I can get the mid-point frequently. But when volume is high – say expiration week or earnings – and I want to buy (or buy back) I have to give in and move closer to natural.nnAlthough I lost a few bucks on PCLN, it has been good to me in the past. This was a lesson and thankfully it wasn’t too costly (if I don’t count the apples I didn’t have).nnSee gbusticz’s comment. This is a very good comment string.nnu25c4 Jeff u25ba

By: Jeff W

Jeff W — Fri, 19 Feb 2010 09:50:10 +0000

I have used straddles in the past for PCLN earnings – and those worked out well. I have heard from more than 1 professional to just get out of current month holdings the week before expiration, or roll them out. That's what I did with every other position I had except PCLN. It was greed and nothing else. Shame on me!

◄ Jeff ►

By: Jeff W

Jeff W — Fri, 19 Feb 2010 09:45:21 +0000

Speaking of TOS and mid-points... I have found that when volume is down and I am selling, I can get the mid-point frequently. But when volume is high - say expiration week or earnings - and I want to buy (or buy back) I have to give in and move closer to natural.

Although I lost a few bucks on PCLN, it has been good to me in the past. This was a lesson and thankfully it wasn't too costly (if I don't count the apples I didn't have).

See gbusticz's comment. This is a very good comment string.

◄ Jeff ►

By: gbusticz

gbusticz — Fri, 19 Feb 2010 00:46:47 +0000

I got hit last year by PCLN during one of the earnings months. I had traded a butterfly and the volatility just kept on going up before earnings even though the price was well within my wings. I then decided not to trade it during any earnings month. I have been profitable with this stock since then. Getting long when volatility is going up may not necessarily help. If the price does not move you will be fighting with theta and delta.

By: Bruce

Bruce — Thu, 18 Feb 2010 13:26:30 +0000

I too suffered the milk of Priceline's unkindness. More so of giving back profits than capital loss. But it sort of makes you feel dumb to say I was bullish on Priceline and lost money in a week that the stock is thru the roof.

The lesson for me is listen to conventional wisdom and dread very careful the week of option Friday and stay the heck out of earnings with calendars.

But the part that really bothered my was the lack of liquidity. I could not clear deals near the midprice which is usually no problem for me on TOS.

I am on to Mar/Apr calendars which I hope to close in three weeks. I have opened an AAPL 210 call which may morpth into a dble since AAPL seems to be favoring the 200 realm.

I also have a 620 Mar/April Call RUT calendar. I wrestled with SPY and SPX, but felt that RUT was a better choice especially for commission structure.

Jeff let's pledge to learn from history and not be doomed to relive it. The Greeks rule and we need to better understand them.