ZL Double Bottom Update 3

This morning around 6am ET, I awoke to find a broken Head & Shoulders. Sounds like a horror movie. It was worse than a horror movie because it was real :) But I had my stop working since I entered the trade, so I new my worst case. Although, the stop isn't much help over a weekend if you gap down big Sunday night at the open.

So, what do we do? We can just rely on the stop at 25.70, or we could exit and look to get back in. Or, we could do what I did, which was get a Put option for protection, and hedge the $324 loss we're risking if the stop is hit. I got a June 25.50 Put with about a 33% Delta for .40*$600/pt=$240.

ZL went down further and finally bottomed and started back up.

By the close we ended up very close to the 8ema, but just under it. The Futures value was down a little and so was the Put option. What do we do here?

Don't want to exit the Futures and find a gap up 8pm ET tonight. Don't want to sell the protective Put option and find a gap down tonight. So, I made a command decision and did nothing. Nothing is a valid choice. In fact, I think it was in "Reminiscences of a Stock Operator" by Edwin Lefèvre (a great book) where the author said something like "the most money I ever made trading was by doing nothing".