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Thursday, September 18, 2014

SPDR Industrials (XLI) Put Options

6/27/2014 
sell (to open) 1 August 2014 $54 put at $0.92
probability of success:  50% (I usually prefer a higher probability)

The lesson:
sell to open put options when the underlying is "oversold" (see chart)


8/6/2014
Ooops!!!!  XLI dipped all the way down to its 200 EMA.  (see chart)
My August short put is ITM.  Now what??















8/12/2014 (roll)
XLI is heading back up (see chart).
Roll my August $54 put to September for a new credit of $0.41.
buy (to close) 1 August 2014 $54 put at $1.67
sell (to open) 1 September 2014 $54 put at $2.08


9/18/2014
buy (to close) September put at $0.05 (see chart)


TOTAL NET PROFIT:  $123.36



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