Anyway, I didn't get filled on Monday, and intended to place my orders again on Tuesday -- I don't believe in GTC for options entry orders, that's the way to get a really nasty surprise after forgetting about the orders. But life intervened, and it completely slipped my mind until last night long after the market close. I went ahead and checked the price action on those three stocks this morning, and this is what I found:
- INTC opened at 23.47, down from its close of 24.15. Their earnings missed expectations by $0.005/share. My put would have increased in price by about 50% overnight.
- IBM opened at 198.27, up from its close of 194.55. Their earnings were $3.97/share, crushing the expected $3.77/share. My put would have decreased in price by 67% overnight.
- XLNX opened at 45 and rallied to 46 in the first 15 minutes of the trading day, up from its close of 43.53. Their earnings were 56c/share, handily beating estimates of 47c/share. By the time I got out of it, my put would have decreased in price by 75%.
That's a pretty big bullet my absent-mindedness helped me dodge! Just how big? Let's say I put $1000 into each of those positions:
- INTC: $1000 * 50% profit = $500 profit
- IBM: $1000 * 67% loss = $670 loss
- XLNX: $1000 * 75% loss = $750 loss
- Total Loss: $920 on a $3000 investment, or -31% overnight. Ouch.
Sometimes forgetfulness saves money.