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Thursday, June 19, 2014

IWM Synthetic Long

3/26/2014 (RD)

+1 January 2015 $115 call at $7.70 (ATM call)
-1 January 2015 $115 put at $9.05 (ATM put)
Net credit:  $1.35

Reason for initiating trade:  "oversold"
(see chart)


sell to close call option at $7.12
buy to close put option at $6.27
Net credit:  $0.85

Reason for closing trade:  "overbought"
(see chart)


On 4/2/2014 (see chart), IWM was "overbought" again.  If I had closed my position that day ($1.94 credit), my gross profit would have been $329 in just SIX days!!  But no....I waited instead.... and IWM took a dive.  So, the LESSON is:  TAKE YOUR PROFITS!!! (especially if you're trading long options)


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