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Friday, March 18, 2016

Spiders (SPY) Mar debit put spread

2/19/2016 (12:38:30 pm, PT)

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

3/18/2016 (expiration)

SPY closed at $204.38, so my entire debit spread expired worthless  


  • 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.