SPY Call Option Exit 8-22-17

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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

SPY Option Trade Exited for 50% Gain -

In follow up to the last post and recommended option trade for SPY calls, the profit target has been met and limit order filled for all of the different expirations which fell in line with the recommendation and past data.

The 50% limit order for expiration last Friday, this Wednesday, and this Friday have all been reached, so the trade is closed for another nice short term gain.

Currently, I expect SPY to move to new all time highs again, probably by the end of this month.  However, the pattern that I see, I feel could signal a major decline to follow.  I will give a perspective on the set up to follow for a possible longer term high with practical idea of timing a short/inverse trade on stocks as the set up develops.

Pete

Exited SPY Call Option 10-1-15

I exited 2/3 of my Oct 9th 189 SPY calls this morning at 4.59 and 4.10 respectively.

I have an order to exit the last 1/3 at 4.95 which would require a move to ~193.00 during today's session.


Pete

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.


Pete