BRCM Trade on Oct 23, 2013 10:41 from rgnuttall: Tradervue User Stock Trades.

first journal entry: test!

Pullback Play (via Options)

BRCM: With underlying at 25.37 I BTO 3 Nov 26 Calls @ 47¢ (10:41EST)
Big Picture: The markets opened down. Several earnings events were playing to the downside to an extent that I believed was overdone. Yesterday NFLX's gap up was followed by an oversized plunge on news Icahn was selling.
Intraday Fundamentals: BRCM was not on my radar until I saw 3 of the SMB guys take it long. (Yeah yeah, don't say it...) I looked at the 1min, 5min, 15min, and daily chart. I also noted a lot of seemingly reliable stocktwits discussing that its morning gap down was out of proportion to its actual numbers AMC earnings yesterday. I saw that the opening price level the first 45 min was holding the bid between 24.87 and 24.97. Then 25.40 higher was tested twice over the next hour. This is when I saw the desk going long. I bought 3 calls (one strike above) as a bullish simple options play. "Trading options like stock". Would Seth shoot me?
RTT: (I have no recording here. Might get Camtasia soon.) Am a novice here, but I did look at the tape. I recall bids holding but not breaking 25.42. After a brief dip, I jumped in, maybe too early at 25.37, as I saw momentum getting strong with offers lifting. ???
Trade Management: I did not get a screen shot of the option chain. I need to do that from now on!! But my mental target was to hit near my strike by Friday (today is Wednesday) for at least twice my debit. This is not the 5:1 SMB target with stock, but with my short-term option plays things are different. While my entry on these type of option plays has directional bias (obviously), is based on the underlying technical basis, AND the option chain itself, the exit strategy is a very different story. Since debits are always losing value (theta decay), exits have to be very tightly managed. I have yet to come up with an ideal exit strategy i.e. math and rule based. For this BRCM trade my mental exit was half the debit price (not including commissions). Just writing this makes me realize how flimsy my R/R math is. I will reach out to some options guys for ideas on "Trading Simple Calls and Puts Like They Are Stock" Trade Management!!!
The position reached +$180 quickly but slumped the last 2 hours to close at +$138. Why didn't I hit the +180? That was OVER my target! (Bella now sends me back to the demo...) Now the trade is holding overnight with additional risk. So...
Trade Review: This is One Mediocre Trade. Even if it goes up further tomorrow and I hit out for a profit at or above my target, this journaling has revealed flaws in methodology as well as execution. At least I've learned a few things. I started this entry kind of feeling good, but after writing it all down I realize it was poorly executed. I feel good about one thing though.. now I'm getting at the process and can start some real progress.