Monday, April 20, 2015

Sold XLE Jun$87/92 bear call spreads last Friday

To keep better track of my strategy of selling verticals at the edges, I'd like to start posting my trades here to keep more accountability for myself and seek inputs from others as well.

With full fund available for opening trades for a new option cycle, I reviewed my ETF candidates for entry at the trading hours on Friday. XLE was closest to the upper Bollinger band, since it rose about $8 from recent trough of $74. It had fallen from around $82.87 to $81.87 in the last couple of days. The next levels of resistances on my chart are $85.50 by 200DMA and $89 to $90 area. I decided to sell Jun$87/92c for a credit of $0.54 with 63 DTE. The short strike had Delta of 0.21/ITM probability of 19.35%. I'll adjust if XLE short strike delta reaches 0.65 and above.

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