Price closed decidedly above the Cup and Handle "brimline". Finally. But the remaining 150/155 Call Spread expires on the 21st, 3 days from now.
The position value closed the day at break even. On one hand, I'm thinking get out while I can. On the other hand, I'm thinking this is the break out we've been waiting for and with the option spread so close to expiration we should have a very high Gamma, which means the long 150 Call option will increase in value quickly as we move up past 150, and the short 155 Call will lose value quickly because we're below 155 with time running out. The high Gamma will accelerate our gains if price continues to rise.
It's not unlikely price could come back down for a short time to retest the brimline then shoot back up. If it takes 3 days to do that, we'll make very little money. If it continues going up without a retest, we'll do nicely. I've never heard any statistics about how often a Cup and Handle break out retests versus doesn't. Wish I did. It would come in handy right about now.
So, if we consider the probability of price going below 150 in the next 3 days to be low, then the choice is between capturing our cost and getting out today for a sure thing, or holding on for a little profit or a nice profit. Decision is to hold the position.
Also, a voice in the back of my head reminds me one of the biggest mistakes traders make is getting out too soon, which reinforces the decision to stay in.
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