Traded at 3:57pmNotice the downward channel lines in white....the stock was currently in the lower half of that channel. Also, the stock was below the 30, 50 & 200 day moving averages...very nice bearish signals.
I chose the Feb 105 because it had the highest time value ($6.40 extrinsic value + $2.05 intrinsic value= $8.45 credit for Feb).
Cost Basis:
I bought the Jun 130 put for $32.45 and sold the Feb 105 put for $8.45.
This gave me a total debit of $24.00= 5 contracts= $12,024.95 debit
Max Profit:
If not called out:
8.45/32.45= 26% in 35 days (to expiration)
If called out:
25-24.00/24.00= 4.2% ROI
Max Loss:
I set my stop for $19.20 (20% loss=$2,424.95)= $11,975.05 stop credit
