Thursday, May 7, 2015

Exited XLE Jun$87/92 bear call with a profit

XLE refused to drop for more than 2 weeks after my bear call spreads June$87/92c were entered on 4-17. But due to market pressure, XLE made significant drops in the last 3 days. With 43 DTE, I was able to get out for $0.21 to obtain a profit of $0.33 (.54-.21, 61%) when XLE was trading around $80.5. Market offered me an higher return for this trade than my average expectation of 50%.

Looking at the chart, XLE has made a higher low 6 weeks ago and higher high a few days ago. So it seems to show an uptrend now. I may enter bullish put spreads if I have the opportunity in the future. Now I have fund available for another new position. I’ll look for a new trade after I come back from vacation in about 1 week.

Separately, I noticed TOS chart might have an issue. The 200 DMA was above the last swing high in this chart. But there are two other chart software, i.e. and ProphetCharts from TOS that indicated the last swing high touched 200 DMA. So the spike in the TOS chart for the IV may be erroneous as well.

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