Its been a while since I updated my trades. I recently entered into two Bull Put Spreads. One on GS and other on SHLD. Both stocks gapped up on good earnings.
Interestingly, I was looking at 'Insight' tab in Think or Swim platform where I found the trades in real time. Here is an example of what Insight tab is all about. (I am having trouble with uploading image...)
My Trades: 1) GS:
The stock gapped up on 14 March and IV shot further up. The IV is expected to go down over time as the uncertainity is over...
I had 2 choices:
Choice 1:
Sell 140 Put to open a credit spread for $70. This meant a max return of 16%.
However, 140 price point was $5 below Open price. So the chances of keeping the $70 was very high.
Choice 2
Sell 145 Put for a credit of $140 or so. This trade was valid only on 15th March had we broken the high of 14th March. This happened on Friday. I havent analysed it and I dont want to put more money on this stock... However this is how it would have looked on 14th:
Happy Trading!
Trader R
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