My Options Examples – Baba Trade 5/31/17.
I am partially happy about this trade made today. I saw that the Nasdaq overextended itself and was due for a slight correction. Seeing that last week Baba, during their earnings report went from 114 to 124 in a single day, I saw a moment to buy puts.
My strike price was 122, and I bought four times, averaging down as Baba was going up. In the end, I bought 33 puts at an average price of .41.
I was thinking, oh-oh, Baba is pushing 124 and above. Maybe, I might have made a mistake in my judgement. As time passed by, everything seemed like the market was going strong, until the moment Chicago PMI came out worse than expected. From that moment on, Baba was slowly starting to unravel.
I, being chicken due to the fact that green was across the board before, went and sold my puts sooner than necessary. Mind you, I sold my options at .54, which is a great trade objectively, but last I saw, my options moved to .88 in about 3 minutes after my trade.
In the end, I made about $400 in 30 minutes. That equates to $800 an hour. Not a bad day overall.