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Friday, July 17, 2015

Spiders (SPY) July Jade Lizard

5/11/2015 (10:44:40 am, PT)

buy  +4 July 2015  $216 calls at $1.78
sell  -4 July 2015  $215 calls at $2.20  (32% probability ITM)
sell  -4 July 2015  $205 puts at $3.03  (35% probability ITM)

Why did I place this trade?
  • stochastics in "overbought" region
  • high probability of success
  • no matter where SPY lands at expiration,  this trade will still be profitable

Analysis:
  • If SPY closes between $205 and $215 (ideal outcome), profit will be $1380
  • If SPY closes above $216, profit will be $980


7/6/2015 (6:30:02 am, PT)

buy back the 4 short calls ($215 strike) at $0.04 to remove the risk


7/17/2015 (expiration)

SPY closed at $212.47 (ideal!), so short puts and long calls expired "worthless"

NET PROFIT:  $1347.51


Success!!





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