I decided yesterday to close my Optionable (OTCPK:OPBL) holding at $5.45. I have been thinking hard about how to handle the most recent situation regarding the Bank of Montreal, and I realize that my trading rules here are forcing me out of this position. In particular, I have always been big on earnings visibility, and the BoM situation casts a cloud over earnings visibility and casts significant doubt on Optionable’s current valuation. In addition, I have to follow my trading rule of never letting a profit turn into a loss, and given the short term outlook for Optionable, I think it is wise to take my profits and cut Optionable loose for a bit.
In addition, I believe that by selling the stock, I can more fully eradicate my own biases and make a better decision as to whether Optionable is a buy after the conference call. The lack of a vested interest gives me a clear head from which to evaluate the position. Of course, I never like watching large profits go up in smoke as they have with this holding, but Optionable has still been a very profitable trade due to my selling on the way up. More importantly, I cannot allow myself to be biased because of my previous paper gains, and the goal right now is to protect capital and live another day. I will continue to follow the stock and will be listening closely to the conference call. If management can give a good performance and explain the potential impact of the BoM situation, I might revisit the position.
I decided to use some of my freed up cash from OPBL to re-enter part of my Nutracea position at $3.76. As I said when I originally sold NTRZ (NTRZ.OB), I remain bullish on the prospects for the stock. Although I cost a quarter by attempting to trade NTRZ, yesterday’s weakness has provided a nice opportunity to re-enter the position at a reasonable price. If the stock shows further weakness, I will be looking to add more.