Man, I sure can pick em!

January 7th, 2014, 01:22 PM

I may have the worst luck in the history of trading. I have been looking into credit spreads recently. Yesterday I picked one in a decent uptrend and sold a January bull put spread that had an 83% chance of finishing OTM and received a $0.57 credit. Awesome! This morning ... Not so much.

Anyone care to guess what the underlying was?

January 7th, 2014, 07:46 PM

Ok. I won't keep you in suspense. It was NFLX. It was almost like they waited for me to sell the option before they downgraded the stock today.

So for you options traders with some experience: the underlying is now very close to my short side of the spread (335). When it touches 335 I will be buying the spread back to prevent further loss.

Do you think I should roll the spread down to a lower strike, or just take my lumps as this downgrade could be the beginning of a larger correction?

January 7th, 2014, 07:51 PM

Ok so 335 is the short side, what is the long side? And is this the monthly Jan, or a weekly?

January 7th, 2014, 08:22 PM

josh

Ok so 335 is the short side, what is the long side? And is this the monthly Jan, or a weekly?

The long side is 330. Jan 2014 (Monthly) 9 days until expiration.

January 8th, 2014, 09:52 AM

Bought to close on a pullback today. Paid 1.25, so roughly a 1:1 R:R.

Man, I sure can pick em!

Discussion in Options

Man, I sure can pick em!