GOOGL Bull Put Spread 1500/1400 Oct 30th expiry
Hi folks, I would love your input on my analysis and rate my trade.
- Last week, I entered into a Bull Put Spread 1500/1400 Oct 30th expiry. I KNEW we're heading into bearish territory, but I listened to my heart instead of my head. Nevertheless, here is my reasoning
- 1500 is below the 50MA and the 100MA.
- By the time Oct 30th comes around, 1500 will also match up to the middle of the Bollinger band. This often acts as support/resistance
- 1500 is also below the 0.382 fibb, which is also holding quite well.
- 1500 is also below the lower trendline.
At this point, I have 2 options. I can either
- leave as is
- roll the short leg down to 1450
- at the same time, I can sell a put call spread at the 10 delta and turn this trade into an iron condor
My thoughts are that the name of the credit spread game is risk management. Max loss on credit spreads can wipe me out, so I need to manage this risk at this point. Rolling the short leg would wipe up 70-80% of the credits I initially took in, so it's definitely not cheap. However, I would rather take a small win than maintaining a high risk level.
What do you think?
- Last week, I entered into a Bull Put Spread 1500/1400 Oct 30th expiry. I KNEW we're heading into bearish territory, but I listened to my heart instead of my head. Nevertheless, here is my reasoning
- 1500 is below the 50MA and the 100MA.
- By the time Oct 30th comes around, 1500 will also match up to the middle of the Bollinger band. This often acts as support/resistance
- 1500 is also below the 0.382 fibb, which is also holding quite well.
- 1500 is also below the lower trendline.
At this point, I have 2 options. I can either
- leave as is
- roll the short leg down to 1450
- at the same time, I can sell a put call spread at the 10 delta and turn this trade into an iron condor
My thoughts are that the name of the credit spread game is risk management. Max loss on credit spreads can wipe me out, so I need to manage this risk at this point. Rolling the short leg would wipe up 70-80% of the credits I initially took in, so it's definitely not cheap. However, I would rather take a small win than maintaining a high risk level.
What do you think?
Comment:
So.. I didn't take my advice and chickened out. Instead of sticking with the trade, I rolled the short leg down 50 points, which cost me a large chuck of potential profit. In addition, I set up a put call spread, thinking GOOGL will continue to go downwards. Well, it didn't. It went up and up, and I had to close the put call spread at a BIG loss.
I'm just sharing my bad trades due to EMOTION!!!! So mad at myself.
I'll be closing put side on earnings day. See you all around next week!
I'm just sharing my bad trades due to EMOTION!!!! So mad at myself.
I'll be closing put side on earnings day. See you all around next week!
It seems like the lawsuit announced this morning didn't phase Google that much; it's long-anticipated after all.
I still decided to roll down my short leg to 1450 to add some more protection while also adding a call spread at 1650.
Now I have an iron condor with the short legs at 1450 and 1650, a very wide safety net.
I still believe the short term trend is downwards and the support will likely be retested tomorrow.