9/28/2012
sell to open 10 Oct 2012 $220 put options at $0.40 (5.14% prob. ITM)
buy to open 10 Oct 2012 $200 put options at $0.17 (2.07% prob. ITM)
credit: $0.23
10/18/2012 (one day before expiration)
buy to close all 10 of the "short" options at $0.05
Why? Because Google released their earnings prematurely during the day instead of after 1:00 pm today. GOOG missed the estimates and the stock plunged 9%, dragging all the high P/E technology stocks with it.
I decided to play it safe and close out the short side before it becomes "in-the-money."
Net gain: $154.47
Side note: AMZN closed above $220 on 10/19, so this spread would have been fine.....but you never know.....so learn to manage the risk.....
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