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Friday, March 11, 2016

QQQ Put Options

1/12/2016 (10:48:51 am, PT)

sell -1 Feb 2016  $105 put at $3.11

Why did I place this trade?
  • stochastics in oversold region
  • high implied volatility
  • 47% probability of success (almost 50/50)

Comments:
  • This put option was $0.16 in-the-money at the time.  
  • I don't normally sell puts that are ITM, but I was just having some fun plus I knew I could fix the trade if it went against me.


2/12/2016 (10:06:10 am, PT)  [roll]

buy to close 1 Feb 2016  $105 put at $7.55
sell to open 1 Mar 2016  $105 put at $8.34

Net credit for roll:  $0.79

Comments:
  • I decided to roll on 2/12 because my put was ITM with only $0.11 of extrinsic value remaining.
  • On exp. Friday (2/19), QQQ closed at $101.63.


3/11/2016 (7:21:44 am, PT)
buy back March $105 put at $0.97

Comments:
  • My put was finally OTM again with 5 trading days left, so I decided to close my position and take profits.

GROSS PROFIT:  $294 (in 2 months)

SUCCESS!