I passed on CMG on account of the big gap up at the open. I decided instead to purchase a single DECK $130 SEP Call option for $2,650.00 when the price of DECK was at about $147.00. Since the option had a delta of about 70 at the time, my risk is less than $500.00 since I will exit the position if DECK trades down to $140.00.
I used this single call as a substitute for my initial plan (last night's post) since my total risk on my initial plan would have been 10% of my account or about $500.00 anyways and also as I prefer the set up in DECK to that of CMG's.
So now that I have the maximum risk that I care to take on with just over 50% of my buying power tied up in the DECK call option I am once again back to observation mode. I am now looking for the markets to confirm this rally attempt and for DECK along with other leaders like CMG to break out to new highs on powerful volume. If I get this I will add another call option to my existing position in DECK (unless I see something more attractive than DECK to add to instead) and get long DECK with 100% of my buying power.
My expectations for any rally we get if we do get one are very low. So any signs of weakness will have me rushing for the exits. Looking forward to big gains none the less.
Good luck and good trading!