CQB Lessons

I took the CQB trade after reading a SumZero-sent .pdf on CQB and banana prices. I then opened a trade on CQB as follows:

	Date/Time		Description		Amount		Net Cash Balance
	02/28/2011 09:31:37		Bought 100 CQB @ 16.76		-1,685.99		---
	02/28/2011 09:34:12		Bought 12 CQB Mar 19 2011 18.0 Call @ 0.69		-846.99		---
	02/28/2011 09:40:24		Bought 300 CQB @ 17.15		-5,154.99		---
	02/28/2011 09:46:29		Bought 7 CQB Apr 16 2011 19.0 Call @ 0.65		-470.24		---
	02/28/2011 09:49:15		Bought 7 CQB Apr 16 2011 18.0 Call @ 1.09		-778.24		---
	03/01/2011 11:30:05		Bought 9 CQB Mar 19 2011 15.0 Put @ 0.45		-421.74		---
	03/02/2011 16:37:38		Sold 200 CQB @ 14.82		2,953.95		---

So this is my analysis of this trade as I recounted it to KTA:

Sent at 4:20 PM on Wednesday

Chan: sold my cqb

as expected

bad numbers

at least on the surface

i learned quite a few lessons::

1) I didn't check the other sources, and do additional research. I checked S@ just now, and apparently some big trader dropped close to 450k puting huge amounts of April 16 puts!

I SHOULD HAVE checked S@ as well as a few other sources.

2) I chased the stock when I was trying to get in.

3) I didn't buy puts at the same time, should I should have.

4) I should have lightened up 50% or so, when FDP numbers came out. By the the thesis was already 50% dead.

5) My technicals were right. Volume and price do NOT lie. I didn't obey them well enough.

kaythiaung05: uh huh

Chan: 6) On the bright side, a) I kept my size small, and b) I hedged with puts, so I am still not as badly hurt as I could have been.

kaythiaung05: u still keeping ur puts?

Chan: 7) Next time if you are gonna play an earnings trade, keep ur size small! and HEDGE!

Especially for volatility-prone stocks like

high flyers momentum stocks

or

these known volatile food producers

8) I didn't keep the size small enough! NO MONEY MANAGEMENT!

9) I am overtrading! After my excitement at SLV trade and talking to Kevin and Melody, I am overtrading a bit too much.

10) NEED TO KEEP STOPS. DO it tonight.

11) STOP using MARGIN!