When do I sell?

Question

I'm holding a Jan 07 $10 option and after today, it's up 200 %. I predicted that AAI will rise to about $15. Your opinions.....

Answer 1

I see first support at 12.75 and 2nd support at 12.00. Definitely sell if it drops to about 11.80 as it might try to fill that gap.

On the upside, I could see it going to 13.50/14.00ish, but probably not past that just yet.

It's up to you how much you want to risk for where you think the stock will go.

Decide how much of your newfound profit you want to risk vs. what you might get back and that should help guide your decision. If the stock is slowing down, you might take that money and find another stock that's moving so that it makes money for you.

Hope that helps!

Answer 2

Well, I suppose there are two thoughts of camp.

A) You're nicely in the money and time decay will only further reduce your payoff

B) You still have a bit to go before the stock reaches your predicted $15. If your theory about where AAI is headed still holds true for you, well, maybe you want to stick with it.

Personally, I'd take the money. But that's just me. I never try and predict tops or bottoms. Just general movement.

Answer 3

I just looked at the chart--VERY INTERESTING. I would hold it if I were you. It looks like someone may be buying them out, or at least buying up a large block of shares.

If I'm right, it will go way past $15. But it's hard to tell how long it will take.

Answer 4

hold with stoploss @ 150% profit

or book profit and by another out of money option with 25% money

Answer 5

i think i would hold too, but dont be greedy.