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
