Closed the XOM May-Jul 95 Put Calendar for a credit of +1.30. The entry debit was -1.95 resulting in a net loss of -0.65.
There were 2 lessons to be learnt from this particular trade. One, never put a calendar spread with earnings due in the short month. This is actually one of my rules for a calendar spread, however, I didn’t check the earnings date before I entered this trade. Bad decision. The other lesson I learned from this particular trade is to follow my other rule on trading which is to adjust the trade when it hits profit/loss targets, breakeven points, etc. I didn’t exit the trade when the stock price gapped outside the lower breakeven point. I hanged on to the trade hoping that it would come back. Really a stupid thing to do considering that everyone knows or ought to know that the market does what it does, irregardless of what I or anyone else think it would do.
