Abercrombie & Fitch Update

1:10pm (EST) Here’s the deal. Abercrombie & Fitch (ANF, $25.99, down $0.50) has broke below $26 and the July 25 puts (ZWRSE, $1.25, up $0.10) have hit our exit target. The “bid” is $1.20 and the “ask” is $1.30. Make sure you put a limit order in for $1.25. Our entry price was $1.00 so this would represent a two-day return of 25%. Some of you may have gotten in for 85-90 cents on Thursday morning when the stock gapped up which would bring your return closer to 50%. Yes, the devil is on one shoulder and an angel on the other and most novice option traders try to push trades past their limit. Sometimes this does work, sometimes it doesn’t. But to be a successful option trader, you must stick to you trading plan and leave your emotions out of it. The final hour will be all about stocks finding their key strike prices as the June options expire today and there will be plenty of movement in the rest of the trading session. You can still ride the Abercrombie puts for a few more hours but place a stop at $1.20 and make sure you exit by the end of the day. Rick Rouse Rick@TheOptionInvestor.com]]>

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