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Wednesday, February 4, 2015

SPY Put Options

1/30/2015, Friday (12:20:22 pm, PT) LL

sold (to open) 10 February 2015 $187 puts at $0.75

Why did I place this trade?
  • "oversold" condition in stochastics (see chart)
  • high implied volatility (high premiums)
  • probability of success:  84%

2/4/2015, Wednesday (11:15 am, PT)

bought (to close) all 10 puts at $0.15

Why did I close my position?
  • approaching "overbought" condition in stochastics (see chart)
  • implied volatility has come down

NET PROFIT:  $584.49
using margin, the return on capital is 2.067% in just 4 trading days!

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