Home Forums Outside Trading Sell ITM vertical credit puts 2 months in a row

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  • #7618
    Udar Gromov

    Sell ITM vertical credit 5-point spread for HD for $3.03 or more.

    Upon entering set an exit price at $0.66.


    Setting Stock recently took a hit and you are expecting a slow steady recovery
    Capital requirement 5-points ( $500)
    Max loss:  5 – 3.03 = 1.97 ($200)
    Max gain  3.03 – 0.66 =  2.37 ($234)
    Recommended lot size x5
    Examples on November 20 enter HD +5-5xDEC215-220P for 2.02 (HD is at 222)
    on December 19 (one day till expiration) exit HD +5-5xDEC215-220P  for 0.66 (HD is 220)

    on December 23 enter HD +5-5xJAN220-225P for 3.03 (HD is at 219)
    on January 16 (one day till expiration) exit for 0.66 (HD is at 227)



    Right now – 2020-02-01 SAT – the thought is that the whole market is ready to tank, plus HD gained sinificantly  in January, so it is a good time to sell ITM vertical credit call that will loose value as HD moves lower.


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