SPY Aug 25th 243 call Option Entry

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After the set up of the big rise in the VIX last week, I had laid out a trade plan to buy a near term SPY call.

However, as of last week, despite a sharp drop in SPY, there was not even a 15 minute chart bullish divergence, present, and so I felt that it would be likely for at least a poke lower to create some divergence before a multi day rally occurred.

And that is what happened this morning, with a nice 15 and 30 minute chart bullish divergence after a slightly lower low than Friday's.

I entered a little bit off this morning's low, and bought the Aug 25th 243 strike call.

I went through the stats from last week's post and found some data corruption in my spread sheet which altered the stats somewhat.  The win % on the set up is ~80% rather than 90% and the optimal limit exit is 60% gain rather than 80%.

So I am using actually a 50% limit gain from last Thursday's close which is the trigger day of the study and the comparable price for the backtests.  And since the price of the option was currently lower, I am lowering the limit exit slightly to increase my probability of a profit on a short bounce back up to 244 to 245.

I have a limit order of 2.50 in for the exit, which would probably take a move back up to near 245 by mid week to fulfill the exit limit order.


Pete