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MT Close out, and ITMN

I had a 5 contract bull call spread on MT that IWO suggested two weeks ago. It was a .73 debit at initiation and I just closed out for 1.22. After commission it was a $230 gain, or 63%. This was just a pure speculation trade that had no basis for entry other than I wanted to speculate. That's why I kept the position size small so my max risk was $365. It was a 40/42 spread and the stock is currently at $42.80. So intrinsically it's worth the max at $2.00 but I took $1.22. Since there is six weeks left until they expire I felt like taking it down and guaranteeing a profit.

The other pure speculation trade I did on ITMN is worth checking out right now. I'm considering putting more of that play on. Last week I paid $15.00 for the stock, sold the Mar $12.50 for $5.05 for a cost average of $9.95. Max return of (2.55/9.95) = 25%. Apparently the FDA response to their drug was better than investors expected so the stock jumped on Friday from $15 to $23. However, apparently the FDA has some future questions. You can still put this play on now and as of this writing the stock is $23.24 and the Mar $12.50 is bid at $12.10. Cost average would be $11.14, return of 12% for 11 days of risk and the majority of the news is already out. The risk left on the table at this point is when are the answers to the FDA questions going to be addressed. I think the risk/reward is more attractive today than last week because most of the unknowns have been answered. You can even sell the $10 strike for a return of 6%. I hate to make decisions as the markets are trading so I'm going to review this tonight and see if I want to throw some more money on this. IWO recommended closing out the trade but I'm not giving up $1.00 of the $2.50 possible profit to close out 11 days early. The stock can go down 46% from here and I still get the max gain of $2.50 so I'm holding. Maybe I don't throw more money at it but instead just take the risk of not closing out early. The 6% return for the $10 strike for 11 days is the kind of risk/reward that I think should be taken from the part of the portfolio that is set aside for high risk speculation.

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