Wednesday, January 10, 2007

APPL 90/85 PUT Credit Spread Update

The 90/85 put spread trade that I entered yesterday is now worth $0.50 putting our position up by $1.70/contract (+77%). Remember, that our net credit basis was $2.20/contract.

IV on those puts has not really moved that much. This has been more of an underlying move up that has sucked the life out the put premiums (remember, that's a good thing for a net credit play).

Well I exited the trade earlier today (too early I might add) for a net debit of $1.00. I just thought that with so much movement from yesterday and still a higher open today that it might make sense taking my profits now and if the stock loses momentum into earnings that there might be another entry point yet.

I'll keep all in the jungle posted.

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