Closing the GILD Call And Taking Profit Tuesday, Dec 24, 2024:

Locking in $1,700 and a 93.15% Gain

Today, I am closing my Gilead Sciences ($GILD) January 17th, 87.5 Call position, locking in a 93.15% profit ($1,700) on this trade. Below, I’ve outlined the key reasons behind this decision:

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1. Exceptional Profitability

The position has achieved a 93.15% return on investment, significantly surpassing the 70% profit threshold I typically target for rolling or closing a long call trade. This aligns with disciplined risk and reward management to lock in gains and reduce exposure to downside risks.

2. Time Decay Accelerating

With only 24 days to expiration, the impact of time decay (theta) is increasing. Although the trade remains well-positioned ITM (In-the-Money), holding beyond this point could lead to diminishing returns unless the stock makes another significant upward move.

3. Key Resistance Level

GILD is trading near its $93.74 support level, which has historically acted as both support and resistance. In the past, GILD has struggled to break decisively higher from these levels, often consolidating or pulling back. While the bullish trend remains intact, I prefer to exit at a high point rather than risk a potential pullback, including several times during this trade.

4. Aligning with the Bullish Trend

This trade was initiated to take advantage of GILD’s strong bullish trend. The stock has rallied significantly, moving the call deep into ITM territory, achieving the desired outcome for this strategy. Closing now ensures I secure these gains while the trend is still in our favor.

By locking in profits today, I’m adhering to the principles of disciplined trading: taking profits when they are available and managing risk appropriately. I believe this approach ensures long-term success in trading by removing emotion and focusing on the data.

Thank you for following along, and as always, let’s keep the focus on disciplined, high-quality trading.

Stay sharp, and trade smarter! -EC 🎯

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*Disclaimer The examples and information on The Options Oracle are my opinion, not financial advice.

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