Tue. 6/8/2021
buy +1 July 9, 2021 $101 put at $1.64 (prob ITM 22.64%)
sell -2 July 9, 2021 $100 puts at $1.47 (prob ITM 21%)
- net credit: $1.30 x 1 x 100 = $130
- if ARKK > $101 at exp, max profit = $130
- if ARKK AT $100 at exp, max profit = $230
- ARKK at $112.59 on 6/8
- stochastics "overbought"
- 31 days 'til exp (DTE)
Wed. 6/28/2021 <--- 11 DTE
buy back 1 short put ($100 strike) at $0.03 to remove the risk of assignment
keep holding remaining debit put spread until expiration
Fri. 7/9/2021 <--- Expiration
ARKK closed at $125.62, so the remaining debit put spread expired "worthless."
NET PROFIT: $125 (31 days)
Return on capital ($10,000): 15% (annualized)
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