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Thursday, April 9, 2015

Spiders (SPY) April Ratio Put Spread

2/25/2015 (11:26:46 am, PT) RD

+2 April 2015  $207 puts at $2.51 (debit)
-4 April 2015  $206 puts at $2.27 (credit)

net credit:  $2.03 x 2 x 100 =  $406
"max" profit:  $406 + ($207 - $206) (2)  =  $606
probability of expiring ITM ($206 put):  34%

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


3/26/2015 (12:54:50 pm, PT)

sell (to close) the 2 long ($207) puts at $3.62 (credit)


4/9/2015 (1:10:01 pm, PT)

buy (to close) the 4 short ($206) puts at $0.52 (SPY was around $208 at the time)

NET PROFIT:  $888.80

Success!



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