... for a 3.18/contract debit; 2.20 ($220)/contract profit; 4.40 total ($440 profit); scratch at 90.88.
Notes: Taking off some (now) 2 standard deviation short puts in the September cycle in the event something "untoward" happens over the weekend. Will add back in next week if needed.
You put on an FXI 43 short put in the June cycle, betting on a trade deal coming through, and ... oops ... it didn't, and your short put is now deep in the money.
What do you do now? Fortunately, there are several paths you can undertake to defend the position and/or reduce the cost basis in any shares you might be assigned either randomly or at expiration.
(a)...
This chart shows the support levels that we are waiting for in order to sell more put options in our cannabis portfolio (green boxes). The evaluation goes beyond just reaching a support level because it also involves analyzing how price reacts when it gets there. For example: IF a bullish pin bar develops at one of these specific supports, then we have a good...
... for a .97/contract credit.
Metrics:
Probability of Profit: 62%
Max Profit: $97/contract
Max Loss: $2303
Break Even: 23.03
* -- Assuming price goes to zero and you do no rolls or take other loss mitigation measures (e.g., sell short call verts against, etc.).
Notes: With background implied volatility greater than 35% and with the recent sell-off in both oil...
