Charmed? Not So Much!
Well I just closed out my trade in Charming Shoppes (NASDAQ: CHRS). As I wrote, on Tuesday I took a position in the Oct 06 $15 puts at 85 cents per.
But the selling by the Mad Money fanatics never materialized. After the heavy, heavy volume Monday morning, volume was light the rest of the week. It could be that all that buying on Monday wasn’t Mad Money fans, as Jeff Clarke logically assumed, but big institutions buying a hot stock as portfolio window dressing. That would explain why there wasn’t alot of selling later in the week since these guys would want to have the stock on their books at the end of the quarter.
On the other hand, the stock did drop 32 cents in the last 3 hours of trading, from $14.63 to close at $14.31. My sense is that that drop was caused by selling from the Mad Money crowd. But the volume wasn’t big.
Nevertheless, my puts rallied towards the end of the day and I was able to cash them out at 90 cents per. Unfortunately, commissions trading options are higher than for trading stocks and they ate up all my gains. I bought my 6 puts for $510 (6*85 cents) plus a $14.50 commission and sold them for $540 (6*90 cents) plus a $14.50 commission. Net profit? $1 – LOL. Now that’s alot of work for a buck!