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Wednesday, July 16, 2014

SPY July Put Options

6/24/2014 (RD)


+4 July 2014 $193 puts at $1.42
-8 July 2014 $192 puts at $1.17

Net credit:  $0.92 or ($0.92) (4) (100) =  $368 cash received (gross)


7/16/2014 (3 days before exp)

buy (to close) July $192 puts at $0.03

TOTAL NET PROFIT:  $338.62


LESSONS:

  • on 6/24/2014, the July $192 puts had a 33% chance of expiring ITM
  • I closed the July $192 puts on 7/16 to remove the risk from my  portfolio
  • if SPY closes below $192 on Friday, 7/18/2014, I will make another $400 on this trade

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