With a broader market pull back, I was expecting a little bit more wind to be taken out of the sails of AMD. The volatility at the open was extremely appealing for some momentum trades, so I buckled up and jumped in. I didn't expect this deal with Oracle Cloud to buoy the price the way that it did, almost all the way into the close.

The loss for the day is a good reminder to follow my own rules. Exiting the positions before the following day, where they would have gotten even more behind was beneficial but the loss could have been half the size if i would have exited when my rules would have otherwise pushed me out.

When placing momentum trades:

• Always set stops. Put options can have a pretty aggressive time-value decay if the stop is trading sideways, that is not much up or down movement. That means if you're not making money you're losing money.
• If you're not confident you won't hit the stop, don't play: Setting stops can sometimes feel like setting yourself up for failure. It's easy for people to only see the positive potential rather than negative potential. Setting a stop limit requires a tacit acknowledge that this could go south. If you're not confident that you won't hit that stop, don't place the trade.
• Don't hold until the close: Earlier this year I had some good success where SMCI would balloon during the open and trading day, only to crash back down at the end of the day. Those trades were quite profitable, but probably more anomalous since SMCI was trading more like a meme stock. While there is action towards the close, the pricing of most options tend to be volatile in the opening hour and the closing hour, but those should almost be considered as two separate "trading days." If you're not willing to hold a position from one trading day to the next, it's probably not worth holding from open until close.

Not every trade is a momentum trade and therefore are subject to different rules. I have had good success identifying slumps in Shopify (SHOP) and CoreWeave (CRWV) which are longer held equities for me at the moment. Options trades are different and require far more discipline in order to avoid burning your hands.

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