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Winner: 2.04% Gain On SPY Puts

Feb. 28, 2021 2:57 PM ETSPDR® S&P 500 ETF Trust (SPY)
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  • Bought the SPY 16APR21 390 puts on Feb 19 at $11.25.
  • Sold the puts on Feb 25 at $11.48 for break even on the trade.
  • 3% portfolio allocation.

I bought the SPY puts on Feb 19 when my MEQ bar turned RED (bearish) - SPY had been stubbornly rising since Feb 1 and looked like it had run into resistance at the $392 level - the day after entry SPY dropped $3.00 to $386 - the next day it dropped again, down to the $380 level at one point, but then rallied strong to finish the day $387 - I didn't close out the trade at $380, thinking that further downside was coming - but instead on Feb 24, SPY rallied again and climbed all the way back up to the $392.00 level - it looked like buyers had once again stepped in to buy the dip, and kept the sell-off capped at two days. 

On Feb 25, I closed out the position in the morning, when SPY was trading at around $388 for a break-even on the trade. 

I sold the puts one hour too early!!

If I had just hung on for another hour I would have booked a 30% gain on the trade. The markets scared me out of the puts - the previous day's rally made me lose confidence in the position, and I just wanted to get out at break even. Sometimes just an hour makes a huge difference with options trades. 

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