Sold Celgene Calls
Bank error in my favor!
This trade of Celgene call options has a short story behind it.
I have discussed how good Schwab’s StreetSmart Pro software is. Well, they dropped the ball on this option bracket order (note to self: don’t do bracket orders for options). I bought my 4 contracts on Celgene and did the order as a bracket. When placing a bracket order you are placing the buy and the sell order at the same time. Schwab’s software is great in that it allows you to determine what you want your sell order to trigger on. You can trigger based upon price, percent gain, etc. I used percent gain on this order. I placed my buy of 4 CELG July 40 calls @ $3.50. The other side of the bracket was the sell order which I placed with the goal of an 8% profit above the $3.50. Conservative trade, but a good percentage gain for a short term trade.
I received confirmation this morning that my call options sold @ $3.40 this morning. The message was “condition met”. It triggered because it saw my 8% gain condition as being met. I had to call Schwab on this one to have it corrected. Somehow, the order was triggered at a loss because the software/system reset the price that it was basing the 8% gain on. When I called they stated that I had changed it to make it an 8% gain on the contracts at a price of $3.10. They were saying that I changed the buy side of the bracket after it had executed. (not possible).
I asked the rep to look into this further because I did not believe that I changed anything. In fact, during the first call he stated that I made the change but could not provide any sort of confirmation, time, date, etc. When he returned my call, about 10 minutes later, he stated that the system reset the price in error and the contracts were back in my account. Since the bid was up around $4.00, they didn’t just execute the 8% above $3.50 order (would have been around $3.75 for you lazy math folks).
I was please that this bank error worked out in my favor. I sold 1 contract @ $3.90 and the remaining 3 @ $4.10. I’ll update the total profit in my trading log.
I still think that CELG is a great long term play for the reasons outlined in my “Celgene is a Bargain” post. This was purely a trade. I am long CELG in both my retirement and primary account.
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