Market Update 7-20-12

So I tried to hedge my call position in Microsoft with a put position and when earnings beat estimates and the price shot up I was ready to get out of my put position and let the call run.  However after getting out of my put in the first few minutes the price went up a little bit but dropped back down.  So not only did I lose money on the put I’m now down on my call position.  My other question is why did the call price stay at the same level but the put price went down, when in after hours trading the price jumped up at least 5 points?  

So here’s my lesson.  Don’t trade on earnings announcements.  Only trade during the day.  If you have to hold on to the trade overnight only do it for a week and two weeks max.  The market makers change the pricing too much and even if the stock price goes back to the same level you bought it at the option price won’t be the same.  

“An ounce of patience is worth a bushel of brains”

If I was patient enough my put would have developed and I would be in the money.  I could have gotten out of my call and still had profit.  Also if I would have waited my Walmart trade would be back up.  So lesson learned. Don’t try to over­-think your position.  What goes up must come down and what goes down must come up.