CLOSE: IBM Bear Call Credit Spread

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.

OPEN: XOM Put Calendar Spread

Opened XOM May-Jul 90 Put Calendar. XOM  has been in a channel. IV is around 26%, which is in the lower quarter of the IV range for the past 6 months. Looking to capture time decay and roll the short leg the following month.

OPEN: IBM Bear Call Credit Spread

I opened IBM 120-125 Bear Call Spread for a credit of +1.1. IBM has just bounced off strong resistance @ $120. ROR of 28.20% with 17 days to expiry, if un-exercised. Stop Loss is set at 1.5x credit (1.1*1.5 = 1.65).

1st post.

G’day mate!

Welcome to the world of Netbiz86. I will be using this site to document my daily thoughts and trading activities.