There were 9 stocks on the watch list for today. Here is a trade from that watch list.
SPDR® Gold Shares (GLD)
Even GLD fell on Wednesday’s pullback. This allowed me to move from the Nov 20 expiry $168 put strike to the $167 put strike and still beat the goal of earning 50 cents for the trade.
Trade 1:
Sold 10 put contracts for Nov 20 expiry at the $167 put strike for $0.78 late afternoon, and bought 10 put contracts at the $155 put strike for .08 cents forming a $12.00 credit put spread returning 5.8% return if held to expiry.
Remember that with all trades I place offers to Buy To Close (BTC) early. I usually start at 50% and then reduce the amount as the trade works its way toward expiry. That means for this trade at the $167 put strike I earned 70 cents. 50% is 35 cents which becomes my opening offer for my early BTC. Over the next week I will reduce it to 30 cents, then 25 cents and then 20 cents and so forth, until expiry.
In this way many of the trades placed in a plunge close early, often within a few days of them being placed. Once closed, it frees up capital to enter a new trade and restart the same process.
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. You always trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. The author assumes no liability for your investment decisions. Read the full disclaimer.