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Friday, January 16, 2015

QQQ Ratio Put Spread

12/12/2014 (10:41:48 am, PT) LL

+1 January 2015 $101 put at $1.55
-2 January 2015 $100 puts at $1.30

maximum credit:  $1.05 x 1 x 100 =  $105
maximum potential profit:  ($1.05 + $1.00) x 1 x 100 =  $205

Why did I place this trade?
  • stochastics in the "oversold" region (see chart)
  • price approaching 50 EMA (possible support?)
  • probability of expiring ITM was 31% (for $100 strike)


1/15/2015 (12:41:53 pm, PT) (1 day before expiration)
QQQ was bouncing around $100 all day long (see chart).
I decided to sell (to close) my debit put spread for $0.64 ($64).


1/16/2015 (expiration)
QQQ closed at $100.82 (see chart).
My short strike was $100!  Whew!  That was close!!!!
I let my remaining short put expire.


TOTAL NET PROFIT:  $151.09                Success!




Learn to SELL RATIO PUT SPREADS!  You get paid up front and you can make money REGARDLESS of the direction of the underlying!

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