I closed out my COST (W) May 112/111 credit put spread for a $120 profit. That was right at 55% of the original $220 premium on 5 contracts. It's just a hair below my closing target of 60 to 75 percent. I know, I know - stick to the plan - but I simply needed to book a winner! It's been a few weeks.
Below is my hoopty chart where you can see my entry and exit points.
One problem I'm still working on is letting trades bleed into one another when I should be playing things one trade at a time. I let that SPY play kind of influence my decision. You know the play I'm talking about... I wrote about it yesterday.
That SPY position got nice and green and I passed on it! Now, it's right at break-even. So my thinking on the COST play was, take the profit now because it has the potential to disappear! Also, another thing I realized about COST is the spreads between the bid/ask can be downright HUGE! Sometimes when that's the case it's just better to let them expire worthless. That's just not how I play, I like to book profits when they present themselves.
Case in point - GM. I set up a June 33/32 put spread about a week ago for a $420 premium on 10 contracts. Well now I'm up $150 before commissions and slippage. Now I originally set this up as a rescue play for the May 35/34 put spread that I took a loss on. Right now if I closed the current GM spread then I'd be break-even on both trades, not bad - but not really desirable either. Here's the deal though - the earnings report comes out tomorrow morning and that's always tricky! I've got it running to June so I've got time to recover if the ER tanks it, but if the street likes the ER, then I'm up tomorrow probably double because the implied volatility will have dropped considerably.
I'm thinking about it now, I'll update at the end of the day.
** Update - I'm still in my GM trade. **