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Wednesday, November 12, 2014

Spiders (SPY) Nov 188 Put Option

10/1/2014 (11:59 am, PT)

sell to open 1 Nov 2014 $188 put option at $2.54

I received $254 CASH immediately!

WHY did I place this trade on 10/1/2014?
  • SPY dropped 1.36% (when the underlying goes down, put prices rise)
  • "bottom" of stochastics (see chart)
  •  probability of success:  67%
Note:  SPY broke through its 50 EMA on 10/1/2014, so it may continue to drop (bad)

On 10/15/2014, SPY hit a low of $181.92 (see chart), so my Nov $188 put option was $6.08 in-the-money (bad).  However, I was not at risk of early assignment because there was a lot of "extrinsic" value remaining in my option.  

So.... I left my position open.  After all, what goes down must come up, right? 


11/10/2014 (7:14 am, PT)

buy to close my put option at $0.05 

NET PROFIT:  $241.18     SUCCESS!



By leaving my put option open, I was able to take advantage of SPY's recovery (see chart).

Learn to SELL PUT OPTIONS!  It's easy, fun and profitable!
Learn on your own for FREE at You Tube or
Pay for 1-on-1 training (details at www.moneyandlilia.com).