Thursday Update: A Word About Stops

The market looks weak and that is reflected by both our portfolios being 100% on the Short side. That is a little too one-sided for comfort, but has been said many, many times in these posts, a system is a a system. 

A Word About Stops

In the short term Prime service we bought the Feb VXX $27 Call on January 16th, paying $1.80. It spiked with Monday's 1100 point decline and its stop would have been hit on Tuesday's rebound rally, but the portfolio held on and today that original position is up 1200%. If you stopped 1/2 of the position at about $12 on Tuesday (+500%) you still pocked a stellar return and are enjoying the further gains on the remaining half. 

FAQ: What if you want to get back in with that original half? Do you buy the same calls? 

A:  In most cases, buy the same expiration, but buy a new strike price at or just out of the money.