By perfect trade I mean executed well and taken for the valid reasons. In yesterdays post, Liquidity Black Holes, I stated that I bought NOV SPY 83 Puts for $2.20. I sold them at the end of the today for $6.46. This was a lot of fun.
Posts Tagged ‘trades’
My First Perfect Trade
November 20th, 2008Liquidity Black Hole
November 19th, 2008On November 13th, the SPY dropped bellow $840, and then catapulted to $900 for a monstrous gain by the days end. I believe that catapult could have been caused by, in unison, investors covering margin calls for leveraged long positions and short sellers covering as the rise grew stronger. I have very little empirical evidence of this and it is sufficiently weak to prohibit me, out of embarrassment, from posting it.
I bought NOV 83 put options on SPY earlier today at $2.20. This time around, I believe their will be A LOT of sellers and no buyers. Alternatively, if it does not fall into a liquidity black hole, I see very little upside between now and Friday close.
I used 1% of my capital on this play.
