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Winner: 40.55% Gain On CSCO Puts

Sep. 30, 2021 11:04 AM ETCisco Systems, Inc. (CSCO)
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  • Bought the CSCO 15OCT21 60 puts on Sep 1 at $2.17.
  • Sold the puts on Sep 15 at $3.05 for a gain of 40.55% on the trade.
  • 3% portfolio allocation.

I bought the puts on Sep 1 after the stock had spent nine trading days in the RSI overbought zone (the Blue Zone on the chart) and looked like they were gonig to break below the 9EMA - the shares then rallied for two days but on Sep 7 the fever finally broke and the stock closed down out of the Blue Zone. 

The shares then slowly made they way lower, closing below the 20MA on Sep 10 - the bearish trend now seemed to be confirmed - but on Sep 15 the stock spiked all the way up to the $59.00 level intra-day - this scared me out of the SHORT position and I closed out the trade at the close of day.

The next day the stock once again had a strong intra-day rally above the 20MA but then closed the day lower - sometimes intra-day moves scare you out of trades - this is why it pays to be patient and wait to see where the stock actually closes for the day - I would have made more money on this trade if I had followed the closing price. 

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