Options Expiration Experiment

I thought it would be cool to show you a typical options set-up and the dilemma that you run into when making a decision to tolerate a pullback or not.  I’m a big believer in swing trading with options, I’m not one to hold an option through to much pulling back. I believe time and risk is money and when price thrusts especially after a couple of gaps I’m out.  Take a look at the following image.  I’ve pointed out where one might have considered buying some puts.  Nice resistance level, price is still in a consolidation period so mo break-out is expected, and no new pay-cycle is expected to start just yet, so a short move down is anticipated.....

http://renegadetrader.com/options-expiration-experiment/

Bear Call Spreads on RUT

It's been a long time since my last condor strategy trade. I set my self a goal of getting back by March, so the trade is on base don the right conditions.

RUT is in an uptrend. Stronger than SPX and DJIA. On weekly chart the high end of the up trend channel is around 680. On daily it is clear that there is resistance at R2 pivot and R3. Both on weekly and daily William %R is overbought and could stay like this for a while.

Also note fib extension of 127% coincides with R2, while 161% coincides with or is lower than R3.

I've been filled on following:

Sell April 700 call
Buy April 710 call

for limit spread of 0.60 c per contract, order was filled. Now its a matter of waiting for a pull back before I enter the bull put spreads. I've given my self time on the contracts as the March contracts will expire in 16 days while April contracts have more than 40 days with more credit.

Enterd Call Credit Spread in SPX

It's been a long time but just trade the my call credit spread in a long time. A bit cautious but getting in slowly. SPX is moving up and has already mad a substantial move. It's up around 70 points from the July lows.

I entered 1025/40 call spread giving $0.80 per contract. If it works out should be a nice return of 5%. The order is way above the 161%fib extension. The idea is the time would be lost by the end of the contract which has 35 days to expire.

Time to sit and watch.

Ready to trade again

I've neglected my options trades. The market has been consolidating and has now broken out give me a direction on where to place my trades.

RUT has broken to the upside and a bit sluggish it is a good few points away from the next resistance at 570 which is the 127% fib extension.

MACD is above 0 and histogram is also above 0, with momentum rising. The market is an uptrend, so will try and place PUT order if there is enough credit and also place Call order much higher to avoid getting touched.

No Fill on RUT

RUT rallied today and I never got the fill. This changes my tactic. I will now be waiting to enter the Call credit spread when RUT hits resistance.

RUT PUT Credit Spreads

Click to enlarge

RUT June options contract have 31 days to expiry, hence plenty of time value in them. Based on the technical situation I placed to the following order:

Sell to open 380 June puts
Buy to open 370 June Puts
For credit of 0.42 per contract

I will Wait to open call positions if the RUT rallies.

Technically RUT has had a big rally and will possibly retrace a bit. I've placed my orders below the low of the 23% retracement area, which is also below the 20MA.

If RUT reaches 539 I will open the call positions.

Still waiting

It's been 2 weeks since my options expired, I've not placed trades yet for a reason. I'll be moving to a safer strategy and be protecting my positions hence doing a bit of reading and back testing.