buy +1 March 2016 $187 put at $2.58
sell -1 March 2016 $186 put at $2.31
net debit: $27 (max risk)
potential profit: $73 (max)
Why did I place this trade?
- stochastics in overbought region
- I was bearish but I didn't want to risk too much money in case I'm wrong
- trying my luck with a small debit trade
SPY closed at $204.38, so my entire debit spread expired worthless
TOTAL LOSS: $27
- Even though SPY was in the "overbought" region on 2/19/2016, there's no guarantee that it would reverse and go back down.
- OTM debit trades are risky and have a low probability of success.
- I was just having some "fun" and decided to try my luck on this "casino play."
- I was only risking $27 which is manageable.