closing the 24feb $FFIV trade

13 mar - took profits and closed the credit put spread i entered on 24 feb

Sold the Mar115/120 credit put spreads for .80 credit x10 =$800 credit
Bought spread back for .13 x10 = $130
Profit on trade = $670

Trade summary- entered on 24 feb as posted below, used 124 as support line, stock dropped on one day down to the 120short strike..still had plenty of time to let recover, again this is why i dont use stops on spreads..would have gotten stopped out / shaken out on that day..stock recovered and resumed trading within the channel. closed today on quick opening pop to 128.. so got alot of time decay, a few points price appreciation and spread reached 85% of max gain with 4days to go. now the risk reward has changed and only $130 is left in the trade..better to take the profit, especially if something wacky comes out of FOMC this week.
    Also if youve been following me on this name, this is the 2nd spread ive done on FFIV for Mar opex. previously had 105/110 that i took profits on 23feb...there was only .14 left in that spread and had 77%gain..by taking that gain i was able to use that same buying power and make another profitable trade vs trying to let the orginal spread expire worthless and not have to pay commission..so doing that made me an additional $500 on FFIV this month... Takeaway is to take your profits at 75% + of max profit...you only make a few pennies more if stock keeps going up anyway

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29 feb - as stated below i rolled the Mar110 short call to the Apr115 short call..paid $1.50 for that roll...still holding the mar115/120 credit put spreads and will roll to apr110/115 if needed. note that earnings are before Apr opex.


24feb - recently closed a Mar105/110 credit put spread for profit and looking to reenter at higher strike. Currently have a DITM leap and Mar110 short call. short call has delta above 95 so will be rolling it up and out to the Apr115 level soon..was priced at about 1.50 debit to make that roll. so heres the thought process.. still have plenty of time in March opex, stock has been holding above the previous breakout level near 123 for few weeks. Level im shooting against that will give some support is that 123 breakout level, safer level would have been 115/110 but wanted more premium than was being offered on those. worse case is that stock pulls back to 115 or lower. if so then will roll that spread down and out to APR 115/110 spread...but will also have the short 115 call hedge working for me if i have to roll down and out. Getting decent premium at this level with 75% probability of max profit using the Trademonster Analyse Tab. The stock along with other cloud companies have been strong fundamentally as well. Additionally, if i have to roll to Apr115/110 then that 115 level will get me under the 50 day moving average for some support.

Sold the Mar115/120 credit put spreads for .80 credit x10

$AAPL trading updates

23feb - took profits on position today. stock has moved up since both entries, got some time decay. trade was for 7-8days this time. bought all spreads back at .30-- with 3weeks to go will be watching for a pullback to reenter credit put spreads likely at a higher strike..maybe near 480 level. since i didnt sell calls as well to condor the position i dont have to sweat out the stock going up and going against the calls.


original blog entry:
15feb - The move that almost everyone was expecting to happen finally did. The much anticipated pullback happened. you could almost taste the sentiment change while watching FastMoney half time yesterday. Ive been looking to reenter with credit put spreads but shooting against the 440 level. Sometimes you get the perfect setup, sometimes you dont. the 440 level didnt give me enough premium at the time. So the stock pulled back from 525ish to near 500 in about an hour...when you get a rapid move like that the put premiums juice up a bit...so taking advantage of that i entered a half position on Mar455/460 spreads.. nothing special about 460level except since there is not a good level to shoot against like a moving average or support line, the 460 level at the time gives me about an 85% probability of max profit. Like ive said before if you are unsure of the position, take half size with the option of either just going with that or adding to it later if stock moves down more.

So on 15feb i sold:

6lots - mar 455/460 credit put spreads at .75

Stock was weak in morning on 16Feb so i added to that to make full position:

6lots - mar455/460 credit put spreads at 1.10

If stock rebounds to recents highs in next week or so i might be taking profits, if not then let the time decay work on it. The strong fundamentals of AAPL make this a good candidate for an easy roll if it comes to that near opex. No interest in making it an iron condor..if/when stock rebounds up i dont want to have to worry about call spreads...just want to worry about taking profits on the puts.

$FFIV trade summary

I had a diagonal spread (ITM leap and a Feb 110 short call)..so using the strategy ive mentioned previously about adding credit put spreads to a ITM diagonal, on 26jan i added feb105/110 credit put spreads at .60.. was few days after earnings..stock did not give up any of the earnings move. since my short call was 110level that was what i was shooting against.. 110 also lined up to about the 50day MA. So the idea again is that i would be holding the LEAP regardless of the price movement, if stock dropped back towards 110 i would gain on the short call, helping to hedge out the credit put spread which would just get rolled down and out to march if needed.
   Best case is stock continues up from my sell point..so over the course of 2weeks the stock maintained its post earnings channel netting me some time decay and on 7feb it broke out of top of channel as noted by a few others on twitter , so i also gained in price appreciation (stock goes up, value of spread goes down). thus, closed the spread for .05 for total gain of 92% of max profit for about 2week hold. additionally i rolled that short 110febcall to the 110 march for credit since the delta of the feb was getting 98ish. this is an example of what they always say on Options Action... Make money if the stock goes up, down, or sideways.