Blood Diamond and other gems

Having just watched Blood Diamond and the ruthless pursuit of money, I feel a little less desperate about making money on my trading.

Trading is fun and sometimes it isn't but at least I don't kill anyone doing it. I might feel like taking my revenge out on someone (like the cat ) when things go wrong but this doesn't actually happen. In fact, I don't even have a cat so that would make it rather difficult and the neighbours would start getting a bit suspicious if their moggies didn't turn up at dinner time!

My long put on the UK energy stock which expires in March seems to have gone against me. My broker very wisely suggested that I should sell some puts at a higher strike to cover some of the losses. For example as I am long the 390 put I could sell an equal amount of the 400 put to have a neutral position. If the share price moved back up I would only lose the difference between the two. If the share price moved down, my long puts would offset my short ones.

We agreed a level (the 400 march puts) and started working a price. I would have got 9p back for the higher strike so my loss would only have been 9-16p i.e. 7p X number of contracts. However, we tried working the price and got nowhere.

I suggested to the broker to keep working the price the next day and he sent me a mail first thing the next day to ask if I still wanted to do this. The share price was down another 8p to 421 so we could have got 10p per contract for the 400 puts, but by the time I got around to it the price had shot up 10p. An 18p swing in 30 minutes !!!

The share price is now sitting smugly at 452 and laughing at me saying "Ha ha better luck next time"

Ah well, this just goes to show you. Sometimes to get out of a bad situation you have to be quick and make a decision fast.

Still, 5 weeks still to go and anything could happen.