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Ask Alan #134 – “Why did my sell-stop stock order go through?”

Alan answers a question posed by Dave, who asks:

If I sell six $80.00 puts on a stock currently trading at $74.64 for $5.00, it will most likely get exercised. Have I got it right that in order to benefit from this trade, the stock must move above $80.00? Thanks for your help.”

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It’s the 2nd Wednesday of the month. Time for another original episode of Ask Alan. AA#134, “Why did my sell-stop stock order go through?”

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About Alan Ellman

Alan Ellman loves options trading so much he has written four top selling books on the topic of selling covered calls, one about put-selling and a sixth book about long-term investing. Alan is a national speaker for The Money Show, The Stock Traders Expo and the American Association of Individual Investors. He also writes financial columns for both US and International publications along with his own award-winning blog.. He is a retired dentist, a personal fitness trainer, successful real estate investor, but he is known mostly for his practical and successful stock option strategies.

6 Responses to “Ask Alan #134 – “Why did my sell-stop stock order go through?””

  1. Alan Ellman May 10, 2017 5:49 pm #

    Premium members:

    This week’s 8-page report of top-performing ETFs and analysis of ALL Select Sector Components has been uploaded to your premium site. The report also lists Top-performing ETFs with Weekly options.

    For your convenience, here is the link to login to the premium site:

    http://www.thebluecollarinvestor.com/member/login.php

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    Alan and the BCI team

  2. Barry W L May 12, 2017 10:41 am #

    Allen
    Why does ETF and stocks sometimes have a large opening gap. sometimes up and sometimes down?

    • Alan Ellman May 12, 2017 1:52 pm #

      Barry,

      The first and last hours of market trading has a large amount of institutional computerized trading making these hours more volatile (generally) than others. That’s why my preference is to enter trades between the hours of 11 AM and 3 PM. Exit strategy opportunity executions are exceptions to this guideline.

      Alan

    • Barry B May 12, 2017 4:22 pm #

      Barry,

      Many times there will be overnight stock/sector newsnews or international geo-political news. The stock movement probably due to Asian and European market activity since they open before the US markets.

      Best,

      Barry B

      • Jay May 12, 2017 4:44 pm #

        Barry, how funny. our posts just crossed making the exact same point :)! I had no intent to be redundant and I did not see your post before I wrote mine! – Jay

    • Jay May 12, 2017 4:42 pm #

      Barry W L,

      Much of it is also our globally interconnected and interdependent markets that trade around the world around the clock except weekends. They impact where our markets open every day.

      Remember the famous line in the movie Wall Street – “Money never sleeps” ? If that was true in 1987 imagine how much more true it is today due to technology! – Jay

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