Wednesday, September 30, 2015

Limit Order to Exit SPY Call Option Bought Yesterday

The 40% limit order on the option suggestion from yesterday seem likely to hit this morning with an indicated gap up and the possibility of at least a little bit of follow through after the open.

It seems to me that the ideal exit order here may be to set the limit order at 70% based on closest fits, which are a more narrow comparison than the stat table I showed yesterday.  But again as noted in yesterday's comments under the post, a scaled exit may be wise.  A third of the position could be exited at the 40% mark, and then set another third or even the final 2/3 to exit at the 70% limit.

I personally have chosen to place a 70% limit order for today's session for the entire position.  By my estimates using an option pricing model, it would take a move to about 192.25 on SPY today to hit the 70% limit order.  That would require a roughly 2% intraday gain.

Additionally from a charting perspective, the gap down from Monday's session is not filled.  Its level is 192.85.  And from comparable charts to what showed up in yesterday's scan, many of the corresponding gap down were filled within about 5-6 days, or sooner.

So the point is that I feel from both a chart standpoint and from a comparison of the most similar markets, that the 70% limit order has a good chance of being reached this week.

I have a limit order to exit the option I bought yesterday at 4.95.



  1. The limit order is hit and I am officially closing this trade based upon the stat profile here. However I will post further details when I exit. A move to fill MOnday's gap down should push the price to near 5.00 on the Oct 9th expiration 189 call.

  2. At this point it seems that 192.50 would have to be hit today for the 70% limit order to be filled. If price does not reach that level today, it would make sense to me to take part of the position off at a lower profit level.