Tuesday, 4/2/2019 (9:34:14 am, PT)
sell short -1 May 17, 2019 2950 call option at $11.10
Facts:
- 20 delta
- stochastics in "overbought" region
- 45 days 'til expiration (ideal)
- credit received: $11.10 x 1 x 100 = $1110
Friday, 5/10/2019 (8:01:45 am, PT)
buy back short call option at $0.75 to protect my profits and remove the risk
COMMENTS:
- After I placed my bearish trade, SPX continued to rise (bad!)
- On 5/1/2019, SPX hit a new all-time high of 2954.13 (bad!)
- On 5/1/2019, my short call option was in-the-money by only 4.13 but it was trading at $26.36 (my "paper loss" was $1526 at the time)
- Luckily for me, SPX dropped after hitting the new all-time high on 5/1/2019
- On 5/10/2019, at 8:01:45 am, PT, SPX hit an intraday low of 2825.39 and I was able to buy back my short call option for only $0.75 ($75 for one contract)
- It's a GOOD thing I closed my trade when I did, because SPX shot back up over 65 points right after I closed my trade!
PROFIT: $1035
CLICK HERE to see the chart of SPX
CLICK HERE to see two videos of a similar SPX trade
Wednesday, 5/1/2019 (11:50:31 am, PT)
sell short -1 May 10, 2019 $1880 put option at $6.80
Facts:
- slow stochastics in "overbought" region
- this trade was a "hedge" against my short call option
- 20.32 delta
- credit received: $680
- 9 days 'til expiration (very short-term)
- FOMC press conference at 11:30 am, PT
Friday, 5/3/2019 (7:26:23 am, PT)
buy back my short put option at $3.00 to protect my profits and remove the risk (of assignment)
PROFIT: $380 (in 2 days)
Comments:
- On 5/10/2019 (Expiration), at 8:50 am (PT), Amazon was trading near $1856 and my put option was trading near $24.95! It's a GOOD thing I closed my trade on 5/3/2019!
- After some positive comments from the White House (regarding the US/China tariff negotiations), Amazon reversed back up to close at $1889.98 at 1 pm (PT)
- My short put option would have been fine if I had held it all the way until expiration (1 pm, PT), but who needs the stress? I was happy to get over 50% of max profit in just two days
CLICK HERE TO LEARN ABOUT PUT-SELLING.
Monday, 4/29/2019 (9:28 am, PT)
sell short -1 May 10, 2019 $1892.50 put option at $10.40 (25 delta)
Wednesday, 5/1/2019 (9:04:36 am, PT)
buy back put option at $6.60
Why?
- to protect my profit
- FOMC announcement at 11 am (high-risk event!)
PROFIT: $380 (2 days)
Learn to SELL put options with my FREE lessons here!
