Trading Edge 2020 Portfolio -Trade #8- SPY - Time to Short
Updated
Ticker: SPY
Position:
~ April 17th expiry
~ $255 Strike Puts
~ Cost 12.32/ Contract
~ Delta = 0.41
~ Break even at expiry = $242.68
~ Run 1x contract
~ Total cost = $1,232 (there may be variance in price)
Profit/ Exit:
~ Initial target is a gap fill around $230, at this point i will roll the position to remove some of the risk and retain exposure to a further fall, which i believe is likely.
~ Due to the insane implied volatility at press time, a stop is likely to be triggered prematurely, therefore, i will not be running a stop on this particular position, and will instead look at rolling to a later date, should the expected move not occur by expiration.
Rationale:
~ For a multitude of reason i expect further downside to persist, largely driven from a macro perspective, i.e. Covid19, supply chain disruptions, lockdowns affecting production etc.
~ Technically, i favor the setup due to the move to the 21 ema, which during a bear market, often serves as a good entry point for shorts.
~ We are currently at the 38.2% fib retracement, although i think a move to the 50% is also on the cards, if anything i would look at entering an additional short position at that point, so this position may be considered "tranche 1" of that overall position.
-TradingEdge
Position:
~ April 17th expiry
~ $255 Strike Puts
~ Cost 12.32/ Contract
~ Delta = 0.41
~ Break even at expiry = $242.68
~ Run 1x contract
~ Total cost = $1,232 (there may be variance in price)
Profit/ Exit:
~ Initial target is a gap fill around $230, at this point i will roll the position to remove some of the risk and retain exposure to a further fall, which i believe is likely.
~ Due to the insane implied volatility at press time, a stop is likely to be triggered prematurely, therefore, i will not be running a stop on this particular position, and will instead look at rolling to a later date, should the expected move not occur by expiration.
Rationale:
~ For a multitude of reason i expect further downside to persist, largely driven from a macro perspective, i.e. Covid19, supply chain disruptions, lockdowns affecting production etc.
~ Technically, i favor the setup due to the move to the 21 ema, which during a bear market, often serves as a good entry point for shorts.
~ We are currently at the 38.2% fib retracement, although i think a move to the 50% is also on the cards, if anything i would look at entering an additional short position at that point, so this position may be considered "tranche 1" of that overall position.
-TradingEdge
Note
255 Strike Put filled at $13.00/ Contract
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