Poor old ODFL finally bit the dust Monday when it closed below 37.49 which was our closing stop limit. So we got stopped out of ODFL for a loss of $1.09 per share on the stock or 45 cents on the option if we sold at the close Monday. Or if we sold on the open Tuesday the loss would have been $1 per share. The options are at zero on the bid price so might as well keep them. Anything can happen in the remaining 3 weeks to expiration and ODFL might come in a winner after all. It's still having problems today though as at present it's down to $36.49.However, if it turns around and goes to $41 in the next 2 1/2 weeks the option would be worth $1. Anything over $40 would give that value to the option before expiration which is always the 3rd Friday of the month. Remember Gary B. Smith said that 20% of these setups are losers and ODFL is a good example of that. It handed us a 2.6% loss on the stock. If you can't stand losing 2 times out of every 10 then don't trade. Losses are a part of trading stocks and options.
The market seems a bit top heavy and stocks are having more difficulty advancing. The stocks making New Highs are down from around 200-400 to about 100 today. So it might be a good idea to try paper trading shorting a stock. Netflix (NFLX) has caught my eye recently as being trapped in a flat Cash In The Box range between $197 and $175. And this morning it is finally breaking down out of that range. After the close tonight we will be able to see if it broke out on a heavy volume spike, which seems very likely as the volume is already over 4 million shares an hour into the trading day. A volume spike above the 50 day moving average line would signal a go ahead for a short paper trade play on the stock or options tomorrow at the open.
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