August 17, 2017

Straight Call Option and a Credit Spread

The long awaited trade finally came to fruition today in the High-Probability, Mean-Reversion Options Strategy as well as my new High-Probability, Mean-Reversion Credit Spread Option Strategy.

Subscribers were obviously privy to the former trade and if all goes well and the market ticks down tomorrow, we could see another nice gain in the options strategy.

As for the new Credit Spread options strategy here is the trade that was placed:

(click to enlarge)

As you can see I sold a vertical call spread or a bear call spread, whichever name you prefer it doesn’t matter to me. I was able to sell the spread for $.34 which will give me a 17 percent gain (excluding commissions) if the Russell 200 proxy ETF (IWM) closes below 86 at August options expiration in 56 days. Of course, I will most likely hold on to the spread for that long as I am perfectly happy taking a 10 percent gain and moving on to the next trade. I only wanted to touch on the trade tonight as I plan to go more in depth as the week progresses with a full analysis in the Weekly Option Report.

Options Indicator – Overbought – Oversold

*No chart overbought/oversold chart tonight. There are a few extremes that have entered the market, so another leg up tomorrow and we should see almost all of the ETFs I follow enter into a short-term overbought state. With that being said I should have the chart for you tomorrow afternoon. Stay tuned!

You can see all of the performance results for the High-Probability, Mean-Reversion strategy here.

Daily Options Links of Interest


Same message: Not much has changed over the past few weeks – range-bound trading persists. I appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread! I will discuss this further in Weekly Options Report.

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