Got stopped out on the IBM trade today. Sold IBM Apr 120-125 Call spread for +1.1 credit. Bought back for -1.58 debit. Net loss is -0.48 on 3.9 risk, ROR is -12.31%. Ouch!
The stock price spiked up and came close to the short strike. Interesting why this trade was stopped out below the stop loss, so, will check this out with the broker.
IBM is still trading below it’s resistance level of 120 and is interesting to see if it would break through it’s resistance level before expiry, which is 8 days away. Had this trade not been stopped out, I would hold this trade through to expiry, unless it breaks resistance.
Lesson Learnt: For future credit spread trades, I will take out the stop loss orders 2 weeks before expiry and just use a manual stop.
