Overview:

For those that took the options trade on Activision posted yesterday, which you can read here, this morning’s gap is an opportunity to TAKE THE MONEY AND RUN!

Unfortunately I was away from my computer when the 74.00 trigger happened.  I intended on entering the position today; however, the gap made the trade a chaser and I do not chase trades.

With that said there may be a few of you that actually took the trade, so this is a follow up for the trade I wish I was in.

ATVI Daily:

The 18 Sept 74 Put is trading around 45 cents.  This is a nice 1 point move which is $100 per contract.  When these moves happen in the options market I simply take the money and run.

The front month option is the most sensitive to time decay which is best for selling and worst for buying.  However the market can move against you so I would recommend closing out the position here.

Summary:

There is always a trade opportunity and options provide an alternate instrument and market to trade.   If you are just learning options, we would recommend paper trading and getting a better understanding of how the market works.

Trading various markets and the ability to trade them allows for looking for the best setups, not forcing trades.  If you bought the stock look to start trimming in the 80 area or on any signs of weakness.  This is still on our radar so we will be looking to take advantage of any pullbacks IF and WHEN the setup is right!

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