Chipotle Mexican Grill (CMG) purchase
So I went out one option further and purchased the August 150 Call for 4.40 with a delta of .33, makign the risk $6*.33 or $2, which is 6% of my account value…much better than 8-10%. Again, the only reason my risk allowance is so high is becaues I’ve got a total trading account of < $5000 at present. Once I build it up to $10,000 and more I will limit my risks to 1-2% at most.
The risk assumes I place a smart stop loss order and that the open interest is high enough that it will sell quickly at market value.
Suzanne @ July 9, 2010