The market never ceases to amaze me in the way that it can move when no move is expected.
I was in a position for August on POT with the titled trade. On Monday the 16th the stock was sitting at $111 or $9 OTM (out of the money) with only 4 days left until expiration. Everything was looking great until this morning when there was a buyout offer for Potash.
The offer was rejected, but the stock gapped up to $142 thus blowing right through our max loss point. Luckily there still was some time in the trade and I was able to exit for $3.00 per share loss rather than the full $5.00 that could have been lost.
This is why we hedge!