Just a quick update. Normally I would have closed out this trade several days ago. But when the indications were to exit the trade, the options were worth so little, they seemed more valuable as lottery tickets than the little cash their sale would garner. So I kept them in case we got the spike in volatility I was expecting.
The options will expire Jan 20th. The most likely outcome now is for them to expire worthless. The good news is that we got a spread which reduced our cost and limited our risk. Not all trades work out even if you do everything right. However, when they don't work out, I always feel like I did something wrong. So I look over the trade and my decision process, and try to find any mistakes or lessons I can learn.
On this trade, it would have been more prudent to have waited for a close above the 200 sma before entering. The candlestick signal was so strong I thought it would, but it didn't. So I took a more aggressive trade and will probably pay the consequences. If I don't like it, then don't take aggressive trades.
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