Thanks.
I guess I should explain the Sbux trade. =P
Lenny Dykstra, met him and Cramer at a investment fest at Rutgers University a year ago, and that is when Dykstra launched his options column on thestreet.com
His whole thing is buying Deep in the money calls, 6 months out, and immediately when filled set a limit sell. He picked his stocks on technicals. Very sound strategy.
Deep in the money ensures you are paying the least amount of time premium for the option, (keep in mind 90% of all options go unexercersised, expire worthless). Stock goes up a buck, buy 10 contracts, and you are up $1k.
I made good money from his picks, from BP, Exxon, Haliburton. I followed my strategy to the t. Limit on calls, price targets, etc.
then came starbux... I went triple the amount of calls I bought when the trade went against me. Lost all the profits I made on previous trades, and some of my own. How did I fail? I wanted to buy cheap premiums, so I bought near the money calls, in the 2 month range, instead of the usual 6 of hte strategy, and went triple the amount I should of.
Fortunetely, the day of option experation, it poped and I was able to recoup 1/10th of what I put in. And then guess what... 2 months later, I would of make the money. I let my emotions get the best of me, didnt have exit strategy on the way down, and put in more than I should of.
And that.... is my lesson 2 that I learned with Investments, in particular Options. =)
