Well, just as I've expected and described yesterday, Microsoft could not hold up its artificially elevated gain and has today given up almost half of what it gained yesterday. The stock price plummeted about 2% today. For my put options, my paper gain was 30% overnight. Not bad for just a day. But I think it is just the beginning. MSFT may need to come down to around $35 before this correction is over. It is over $37 at the moment. I will still hold my put options for now.
What's the lesson? Never follow others as part of the herd to chase a hot stock. More often than not, such kind of herd chasing will end badly. For savvy traders however, this is the opportunity for some easy money to make. I love to see others blindly chasing up a stock as I know my term has come. The more & higher, the better. But I hope my blogs can help you avoid such kind of traps!
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