My kids ages nearly 8, 6 and 3 have just discovered their new favorite song “Under Pressure” (a Queen original) — I’m sure the over 40′s would know this well! 
They’ve been replaying the video over and over and one of the dialog of the elephant seal Brian The Beachmaster caught my attention – “Sometimes you got to back up to move forward” to share to you a lesson that helped me trade yesterday.
So we did get that rally off the weekend from Euro summit, sending indexes rocketing off. Since I wanted to wait for a confirmation of the price move, I got “under pressure” to buyback my protective position (Covered Call STOC48) that I had opened last week at 55cents. The share price rose moderately Monday, but the spread (difference between what the buyers want to pay versus sellers want to get) was quite wide, and being under pressure to close I nearly gave in to the seller’s price. I was going to take a loss that would exceed my initial risk (or 1R) of 10cents. I was going to take more than double the loss — which is nearly 25 cents. However, I was “not feeling good” about closing it, noting that the steep rise in the oil price can get a pullback in price (which happens more often than not – and confirmed in Asian trade alone it was down by $1!), so I was able to get a grip and went through my trading procedure (details here), and coupled with having the kids on school holiday and wanting to have a lunch out with them, I abandoned the buyback plan.
Watching the oil price through the European market and US, it did end more than $1.60 to close lower at $83.50-ish sending the oil shares lower at opening (at next trading session – sleep optional! hehehe). It was a slow day, but after lunch, with interest rate put on hold in Australia and not providing any cause for joy for the financial markets, the stock drifted off 20 cents lower later this afternoon — I can see though there was a higher volume of buyers than sellers, at this price near 52 week lows, it certainly was attractive, and I jumped in with my buyback plan once more. Closed the trade STOC48 at 63.5cents, maintaining my target for 1R loss.
Sometimes, you got to back up to move forward.
Enjoy the music and the video “Under Pressure from Happy Feet 2″
