Today I wanted to share a recent options trade I made, that while successful, could have generated much more profits if I was more patient on my entry, and paid less for the put options. Let me explain…

The catalyst of the this short trade was a failed FDA approval. I predicted a lot of selling pressure. I bought a PUT option (strike 30) for about 8 days out expiry. However, I was so excited to make the trade, that I bought the options at the worst possible time. I rushed the entry, and overpaid by about 2$ per option! Because of this, despite being correct on my thesis and watching the underlying stock decline in price, I was mostly in the red for this trade. Truth be told, I was very happy with how I exited the trade – I waited at watched all the correct indicators to signal a good opportunity to sell.

However, despite selling at the best possible time, I only made a small profit – whereas, if I had bought the options at any other time during the 1.5 days I held them, I would have made hundreds of dollars more! So the lesson (again, unfortunately!) is the be more patience with my entries!

Mistake: Lack of patience with entry.

Trade: Short via put options []

Ticker: RETA (DEC17 21 30 PUT)

Entry: $2.750

Exit: $3.100