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The limit exit of 2.50 for the SPY Aug 25th 243 call option was achieved today.
The purchase was yesterday morning at a price of 1.10 for ~125% gain on the option.
And the option price on the trigger day of the VIX up >30% study 1.70, and so the 50% gain from that trigger level was also achieved based on the trade plan I detailed in the post.
The key take home here is that the biggest factor involved in the option price is the underlying stock price. And when set-ups occur with consistent skews in forward price moves, indicating a strong tendency for price to move sharply/significantly in the time frame of the option, the options can provide a profitable speculative vehicle for the trade.
Also another finer point is that the VIX up > 30% criteria was significant in its own right, but when combined with a close look at the short term technical analysis, showing that there was still some probable downside after the trigger, it enable a better entry price - in this case the improvement was an entry at 1.10 rather than 1.70 or close to it. The result was that on this trade I was able to get a return of 125% rather than 60%, while still keeping to the parameters and backtest on the trigger study.
Pete
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