Friday’s big rally doubled the value of our calls, but I am so skeptical about this showy buying binge that I will suggest selling the options at-the-market when stocks begin to trade on Monday. This will likely produce a loss, since subscribers paid as much as 0.85 for the May 18 248s. But don’t assume that because they went from 0.24 to 0.48 on Friday that they will continue to ascend at that rate. Much more likely, unless the broad averages explode to the upside again, is that the options will barely uptick; then they will sink back into oblivion, as options nearly always do when bought against the dominant trend. (Also, did you notice in the chart that DIA became an appealing ‘mechanical’ short at the green line?) If you want to hold onto the options anyway for what-the-hell reasons, that’s okay too. But officially, we’ll plan to take our lumps at the opening bell. Check back here Sunday evening in any case, since it’s remotely possible index futures will be doing something crazy-bullish at that time. _______ UPDATE (May 7, 8:12 p.m. EDT): As anticipated, the options blipped briefly in the early going (to a high of 0.90) before relapsing to close at 0.50. Based on reports in the chat room, I’ll score the trade as a push. Losses in any event would have been small.
