This pattern confirmation can push this atleast to the Symmetry Target / Projected Target.
Active Position Management required for this play.
79.80 -79.60 for a low risk manageable entry.79.20 - 79.00 for Hard Stop.
Commenti
UDAY_C_Santhakumar
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EVEN after Stopping, the Symmetry Target is hit. What can we do? Learn from it,
UDAY_C_Santhakumar
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The 2 Call contracts I have will Expire Worthless - No Loss (Risk Management). Controlling the position with the PCS and Diagonal at right time, created the best risk management here. If I had over exposed my PCS - I am toast... here.
UDAY_C_Santhakumar
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If I did not manage the risk against this trade with Options, This would have been a loser (among many, if I did not manage the risk on those as well). Managing risk = Consistency. Doesn't mean that the trade cannot go totally against me and let losses multiply. Can Happen. But remember the probability is in your favor. Long Options are riskier than stocks, thats the price you pay for leveraging.
UDAY_C_Santhakumar
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Final Update for the week, I do not foresee IYR going below $79 today. So Essentially the trade on march calls is totally risk free (collecting all the premium from PCS - expiring today and Calls (part of the diagonal) sold - collected premium yesterday). If IYR decides to breakout and hit the target in next 3 weeks, Its all profit. Manage your Risk, and you can emotionally detach yourself from getting stopped out at wrong levels.
UDAY_C_Santhakumar
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Quick Position Update, As i Checked the price, the Calls Sold (part of the diagonal created) is worthless, bought back for a nickle. The PCS - put credit spread starting to take a bit heat. Was not a bad idea to hedge the position with diagonal. With the credit received the PCS breakeven is pushed down to 78.7 from 79.1 - As long as This trades above 79 (hard stop) the position is not a losing position. Currently, I will treat the March Calls independent, Look to establish a Diagonal on a rally to bring in some credit. Also will close the position if the Diagonal will make money in next two weeks. Live to fight another day.
UDAY_C_Santhakumar
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How I am Handling this trade - Bought March Calls and Sold Feb PCS 1:2 Reward/Risk - Using Options Pain to establish A diagonal with weekly expiration on the calls. The best scenario would be this trading above 81 after this week, Calls make money then, PCS expires in two days (risk will be risk) - Sold Calls (Feb) expires worthless (risk reduced). Worst scenario - That this tanks below 78 This week. Where the sold calls will expire worthless. PCS will be loss, Calls will have time. May try to hedge to a break even.