Hi folks, I would love your input on my analysis and rate my trade.
- Last week, I entered into a Bull Put Spread 3350/3200 Nov 20th expiry. I KNEW we're heading into bearish territory, but I listened to my heart instead of my head. Nevertheless, here is my reasoning
- 3350 is below the 50MA, which has served as very good support in the past.
- By the time Nov 20th comes around, the 100MA would also be at the 3350 area.
- 3350 is also at the 0.382 fib retracement level
At this point, I have 2 options. I can either
- leave as is
- roll the short leg down to 3300
- 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 3350/3200 Nov 20th expiry. I KNEW we're heading into bearish territory, but I listened to my heart instead of my head. Nevertheless, here is my reasoning
- 3350 is below the 50MA, which has served as very good support in the past.
- By the time Nov 20th comes around, the 100MA would also be at the 3350 area.
- 3350 is also at the 0.382 fib retracement level
At this point, I have 2 options. I can either
- leave as is
- roll the short leg down to 3300
- 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?
