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Wednesday, February 1, 2012

ATPG sinks, tempted to swing trade

Trades:
  • Last week: Cancelled Limit Order Buy-to-Close ATPG Covered Call.
  • January 27th: Topped up account by 200 CAD. Converted to 196.52 USD.
Gut Check:
  • ATPG was on the decline but still above my Covered Call Strike of 7.00. This morning, it gapped down A LOT and opened at 6.88. Has been going down. Presently 6.58. I was tempted to buy back my call at a modest profit and re-sell at Strike 7.00 but with a limit price of 1.00.
  • The problem is, there's only 2 weeks left, and I don't know the reason it gapped down. Maybe some development in the investigation into possible securities law violations that I don't yet know about? Insiders supposedly selling and that probably triggered a big sell-off and price drop today.
  • The payoff is 2:1 -- I give up 5% now in the hopes of getting 10% later. It's speculating. In the end, I decided I didn't want to do it. I'm not supposed to be a speculator.
  • Let it sink. If it does, I keep my profits AND keep my stock -- i.e., back to my trading strategy.

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