Trade 1 (10:29:07 am, PT)
sell -4 July 6, 2018 2755 puts at $1.30 (delta 24.22)
buy +4 July 6, 2018 2720 puts at $0.05 ("wings")
- net credit: $1.25 x 4 x 100 = $500 (max profit)
- margin: $13,559
- this is a semi-bullish trade
Trade 2 (12:25:29 pm, PT)
buy +4 July 6, 2018 2775 calls at $0.05 ("wings")
sell -4 July 6, 2018 2765 calls at $1.00 (delta 37.41)
- net credit: $0.95 x 4 x 100 = $380 (max profit)
- this is a semi-bearish trade
Trade 3 (12:41:43 pm, PT)
- buy back 2765 calls at $0.10 to remove the risk
- let long calls (2775 strike) expire worthless
Trade 4 (12:56:58 pm, PT)
- buy back 2755 puts at $0.10 to remove the risk
- let long puts (2720 strike) expire worthless
Comments:
- at 12:27 pm (PT), when SPX was at 2764.41, I could have bought back my short puts (2755 strike) at $0.15 and be done, but I got greedy and didn't want to pay $0.15 ($60 for 4 contracts) .....
- BAD DECISION! 😱😱
- suddenly SPX started dropping and hit a low of 2755.16 at 12:50 pm (PT) ..... that's only 0.16 from my short strike of 2755 😖😰😲
- at this point, the premium for the 2755 put jumped to $1.20 and my lovely profit of $440 (at 12:27 pm) suddenly turned into a profit of only $20 😭😭😭
- STRESS! STRESS! STRESS!
- I was VERY lucky that SPX reversed back up after hitting the low of 2755.16 and I was able to buy back those short puts (2755 strike) at $0.10 😅😅
TOTAL PROFITS: $800 😁
