buy +4 August 2015 $216 calls at $1.24 [22% prob ITM]
sell -4 August 2015 $215 calls at $1.60 [26% prob ITM]
sell -4 August 2015 $203 puts at $2.18 [30% prob ITM]
Why did I place this trade?
- stochastics in overbought region
- max profit = $1016 if SPY closes between $203 and $215 at expiration
8/12/2015 (6:43 am, PT) [stochastics bottom]
buy to close the four $215 short calls at $0.04 to remove the risk
8/19/2015 (11:12:45 am, PT)
buy to close the four $203 puts at $0.04 to remove the risk
the four long $216 calls expired "worthless"
NET PROFIT: $966.40
THANK GOD I closed those four naked puts early because SPY closed at $197.63 on Expiration Friday!!!! Those puts would have ended up ITM.
The lesson here is:
ALWAYS BUY BACK YOUR SHORT OPTIONS AND REMOVE THE RISK EVEN IF EXPIRATION FRIDAY IS JUST A FEW DAYS AWAY!!!
Use OPTIONS to enhance your returns and protect your portfolio.
Learn on your own for FREE by watching MY VIDEOS HERE or
Pay for customized, one-on-one training (details HERE).