My Trading > My Trading Journal > February 8, 2012
My Trading Journal
February 8, 2012
7:19 pm (PST)
EA dropped after hours, after the CFO left the company. We'll see what happens tommorow. GRPN (GroupOn) dropped about 15% after-hours. When looking at my "Watch List" over the past couple of months, one of the obvious possible trades was to write call credit spreads on GRPN and LNKD since they are overvalued. And even though this over-valuation presents an opportunity, the problem is that these stocks are overpriced based on irrationality. And a mis-valuation based on irrationality is harder to predict than a mis-valuation which occurs in a more benign emotional environment (i.e. a sutuation where a stock just "happens" to be overvalued). Because of this, I held off on writing those spreads. This is an area I plan to explore more in the future.
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