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Thursday, April 2, 2015

Diamonds (DIA) April Ratio Put Spread

2/19/2015 (11:26:53 am, PT) FP

+2 April 2015  $178 puts at $3.32 (debit)
-4 April 2015  $174 puts at $2.24 (credit)

max credit:  $1.16 x 2 x 100 =  $232
"max" profit:  $232 + ($178 - $174) (2) (100) =  $1032

Why did I place this trade?
  • stochastics in overbought region


4/2/2015 (12:35:15 pm, PT)

sell (to close) the 2 long puts ($178) at $2.29
buy (to close) the 4 short puts ($174) at $0.95
(net debit of $0.39)

Why did I close this trade?
  • the net profit was higher than the original "credit" of $232
  • I had a "feeling" DIA would not close below $174 on expiration Friday 
  • TAKE PROFITS!

NET PROFIT:  $300.65

Success!


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