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Monday, November 17, 2014

Spiders (SPY) Nov 191 Put Option

9/24/2014 (9:18 am, PT)

sell to open 1 November 2014 $191 put option at $1.82
I GOT PAID $182 up front!

Why did I place this trade on 9/24/2014?
  • SPY was touching its 50 EMA (see chart)
  • bottom of stochastics (see chart)
  • probability of success = 73%

On 10/15/2014, SPY hit a low of $181.92 (see chart).  My put option was in-the-money by $9.08.  


However, I was not at risk of early assignment because there was plenty of "extrinsic" value remaining in my put.  So.... I left it open and hoped for a recovery.  After all, what goes down must come up, right?

buy to close my put option at $0.03


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