This was an order that I had input this morning when going through the my broad market charts. Reasoning is below:
1. Clear support at 352.75 (White line)
2. Long term bullishness on equities, especially if inflation continues. Caveat to this is that with rising rates I do think Tech will feel the pain more than other names. As such this position is 1/2 my usual size.
3. Yellow line (338) identified as recent low, and middle of a lower trading range from Apr / May.
Yellow line then acts as target for the short leg. I.e if I take this trade, the short leg must be below this.
As such, I found the 336/332 spread that paid 10% Return on Margin (or risk) and was below my target.
Set the order this morning and it filled a few minutes ago as the market came down a bit.
Questions, Comments, Leave em below!
1. Clear support at 352.75 (White line)
2. Long term bullishness on equities, especially if inflation continues. Caveat to this is that with rising rates I do think Tech will feel the pain more than other names. As such this position is 1/2 my usual size.
3. Yellow line (338) identified as recent low, and middle of a lower trading range from Apr / May.
Yellow line then acts as target for the short leg. I.e if I take this trade, the short leg must be below this.
As such, I found the 336/332 spread that paid 10% Return on Margin (or risk) and was below my target.
Set the order this morning and it filled a few minutes ago as the market came down a bit.
Questions, Comments, Leave em below!
Nota
Update with Answers for some of the questions from the comments below:1. Bought or Sold?
This was a credit spread, where I received a credit for accepting the risk of the spread.
2. Credit received = $44 at time of entry (you can get more now as the market pulled back some)
3. Max risk = width of the spread ($4) - Credit received * 100 shares =
4 - 0.44 x 100 = $356
With options trades like this I look to enter with a probability of profit of 80% or greater, which is why I accept a lower risk to reward ratio. In addition, I will use take profits and stop losses to increase this probability of winning and reduce max drawdown.
Nota
Closed this yesterday for a -220% loss (1.62 debit). As it was approaching my short strike. I may re enter this trade with a lower strike, but as I am still a part time trader and this week is busy with work, I closed it while on the road yesterday and didnt bother rolling. Proof is in the pudding, we cant win every time :)
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.