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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.