IOC Follow Up

Well, I'm selling the last contract in the IOC Put position.

 Wednesday I closed 80% of this position at a 73+% gain, today, even though prices are lower and technically in a worse place, the Put is only worth 43%. Volatility is a bit lower today, but not a whole lot lower, it does contribute to the faded value of the put. However this is the reason I took 80% off the table as I saw a short term reversal coming and I'd much rather start a new position than sit through a correction and this is one good reason why. While I did trade 200 times a week at one point, I AM NOT a day trader and found that out the hard way. I'm not trying to be a day trader with options here, I'm trying to use the tools we have the best way I know how to make the most on a trade. I'd much rather be trading a trend like the core short positions, which IOC is a core short in the equity model portfolio and that hasn't changed at all, still the same size position with no intention of changing it because it is not leveraged.

 Here's the reversal we saw Wednesday that caused the sale of the majority of the put position, we saw it in 3C first earlier in the day and then the closing candle was bullish with large volume which is a good example of the reversal concept I talk about so much-remember I saw "It just means high probability reversal, there's no target or time" and as you can see so far it only lasted a day before IOC made new lows today BELOW the support level I REALLY wanted to see broken, but we have not closed below this level yet and the chance of a day like today happening is the reason for probably the first time ever, I partially closed an options position to see if this move would come.


 Intraday look at the volume on the moves below and above the key level, the volume down hit a lot of stops and few retail traders buy a move like this, which means the buyer of last resort, the Specialist had to absorb any market orders there were no matches for, thus that specialist probably wants to get rid of those shares, but needs higher prices to do it. Yesterday on a break above resistance he/she got some demand and higher prices, but it doesn't appear to be enough to have cleared out the inventory.
 

 The 3 min 3C chart shows the positive divergence which was the reason for closing 80% of the position at a 73+% gain, then the negative sending IOC lower, right now 3C is about in line with price, there's no strong signal here.

 The 5 min chart also shows the positive divergence, the reason to close the put position and again a negative and reversal, but again, 3C is not low enough to convince me that this low will hold without some more loitering around the resistance area to let the specialist exit the inventory that they have to buy by law if it is at market.

 The 10 min chart shows all the same, it is a little deeper, but not deep enough. I wouldn't enter a put position on these signals so why should I hold one?

The 15 min showing the bigger reversal from what I believe to be a head fake pivot, still not a leading divergence which is what I'd need to see to hold the options position, the equity short will stay in place.

I'll keep an eye on IOC and report back any major changes.
As for volume...

There's the volume figures for the last 3 days, obviously the specialist isn't holding all of the shares, but the last 2 days thus far haven't been enough to allow a specialist to unload a position they may have been forced to take on, thus until volume picks up, support stays broken and 3C tells me, I'll wait for a new put position.