I sold my MO spread for a loss.
music selection: “Candy’s Going Bad” — Golden Earring
On 12APR2021 I bought a bull call spread in MO at the 50/52.5 strikes and 18JUN2021 expiry for 1.35 a share across 37 spreads. The spread was in good shape until Biden announced a plan to regulate nicotine in tobacco products with a goal of reducing the amount to a non-addictive level. MO tanked. With 53 days left to trade I needed an 11% rally to recover. With the bad news hanging over the stock I couldn’t see it happening.
I sold for 37 cents. The trade was in force for 15 days and loses 3,626 or 72.6% of my capital at risk. It hurts to take a loss like this. I’m committed to reporting my losing trades so newbies don’t get the idea that options investing is risk free money. You pays your money and you takes your chances.
Devour your prey raptors!