Spread in WMT was threatened, DAL was assigned early.

music selection:  “Hocus Pocus” — Focus

Most of my in the money net debit spreads will be carried to expiry and auto-exercise for the maximum profit.  Sometimes, when the shares are deep in the money or there is a dividend due, shares will assign early.  And sometimes, the price action moves against me and it makes sense to close early to limit my risk.

With Walmart (WMT), I entered the trade with the one month trend chart confirming that shares were headed down and a bear put spread was indicated.  That trend reversed and shares were within one percent of moving out of the money.  I decided to close early rather than be caught hanging as the chart was now against me.  I originally bought the 120/125 strikes bear put spread on 21JAN2020 for 4.29 a share.  I sold today for 4.72 a share.  I booked 245 dollars in profit on 5 spreads over 29 days.  That was good for 11% gain or 144% annualized.  Not bad for a position that moved against me.

I had 10 bull call spreads open on Delta Air Lines (DAL) since 16DEC2019.  I had the 50/52.5 strikes and entered at about 2.18 per spread.  I had 4 contracts assign early.  I was unable to catch a bid to get extra profit out of the remaining time value on the hedge so just exercised my calls for the full profit originally available.  I earned 245 on 874 capital at risk over 65 days.  That was good for a gain of 28% or 157% annualized.  The six remaining spreads expire in March.

Devour your prey raptors!

Closed two positions early

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One thought on “Closed two positions early

  • February 20, 2020 at 2:50 pm

    Well done! Killin’ it.


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