buy +1 March 2016 $181 put at $2.78
sell -2 March 2016 $180 puts at $2.55
Analysis:
- Net credit received: $2.32 x 1 x 100 = $232
- Theoretical max profit: ($2.32 + $1.00) x 1 x 100 = $332
- Stochastics in overbought region
2/11/2016 (11:28:05 am, PT)
sell (close) 1 March 2016 $181 put at $6.32
(stochastics in oversold region)
3/10/2016 (6:30:03 am, PT)
buy back remaining 2 short puts at $0.05
GROSS PROFIT: $854 (GREAT trade!!)
COMMENTS:
- My actual gross profit of $854 is much higher than the theoretical max profit because I "broke apart" my ratio spread and sold (close) my long put on 2/11/2016 when SPY was at the bottom.
- Once I sold (close) my long put, I ended up with an extra "naked" put.
SUCCESS!
