It's Baaaack!

Wow! Today seemed like a few months ago with the volatility, and unfortunately, it happened just when I was getting kind of comfortable with the profits that I had accumulated over the last seven weeks. Hey, when you ride AAPL, GRMN, NVDA, and PCP up from the bottom in mid-August to today, there is bound to be a little panic when the herd gets nervous.

While sitting at my desk this morning and checking the boards, I noticed that AAPL had just hit another 52-week high and I decided to take another 1/3 of my AAPL calls off the table. After feeling pretty smug about the profits I had and then going to lunch, I noticed when I returned that the VIX was actually positive (while the market was still up big), the put/call ratio ratio was a screaming imbalance, and SPY had just started to roll over. It looked like technology was leading a minor run to the exits, so I checked BIDU and that is when all the blood left my head.

I simply couldn't type fast enough to sell to close the remainder of my AAPL and GRMN calls in enough time. There is nothing worse than typing in the bid price for an option only to have the specialist move the mark down faster than you can sell. It was ugly. I think I was losing something like $25 K a minute in my trading account. It certainly reminded me what "fully leveraged" meant. I simply couldn't unwind fast enough.

I wasn't that worried about PCP, TIE and ATI options because they had already been taken out and shot the day before, but the tech stuff had a lot of air under them.

So I waited until I was sure that an intraday bottom was in, and bought everything back and then some. The move up was slower and I was able to get my bids. Besides buying AAPL and GRMN options, I also bought GS calls.

While I think that selling and tehn buying the same options back saved me money, I will need to slow things down and analyze it all fully this weekend. Liquid options, like AAPL, were easier to dump than GRMN. With those calls, the specialist just spread the bid/ask wide, making money on the fear and greed.

I will definitely be looking to lighten up if the tape lets me tomorrow. I need to raise cash if this technology sell off becomes a deeper trend. I am definitely exposed and this roller coaster is not for everyone.

The Bear won today, but the Bull has been very good to me.