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Monday, June 20, 2022

Options trade : ARK Innovation ETF (ARKK) bullish trade

 GET WEEKLY TRADE IDEAS.

FREE OPTIONS TRADING LESSONS HERE.


10/22/2021

buy +2 Nov 26, 2021 $107 puts at $1.49 (prob ITM 23%)

sell -4 Nov 26, 2021 $106 puts at $1.30 (prob ITM 20%)

  • net credit:  $1.11 x 2 x 100 =  $222
  • overbought
  • 35 DTE
  • this trade is called "ratio put spread"


11/17/2021

buy back the 2 "naked" puts ($106 strike) at $0.16 to remove the risk


11/24/2021

sell (to close) the embedded debit put spread (2 contracts) at $0.63 for an extra $126


PROFIT:  $316


NOTE:  On 11/26/2021 (expiration), ARKK closed at $107.12

If I had not sold (to close) the debit put spread on 11/24/2021, I would have missed out on the extra $126.