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New trade – Amazon (AMZN) in troubles… and my easy money trade too! Sold some calls.

What was about to be an easy money trade a week ago is about to become a disaster. A week ago I sold a bull put spread expecting Amazon (AMZN) to go higher. Well, I must admit I didn’t expect Amazon would miss it’s quarter the way it did.

Right now, AMZN sold off -10% after hours and fell thru both of strikes of both legs of my spread.

Right now the stock is at $320.52 a share. My upper (short) strike is at $332.5 and the lower strike is at $322.5. So it is not that bad as it could be, thanks to my original Delta of that trade. The entire trade delta was 0.07 or 7% chance that the trade ends OTM.

That was at the beginning. Now everything is different and we are in the money. Fortunately not deep in the money, so the trade can be managed and rolled.

I will roll this trade further away in time, but I will do that tomorrow later afternoon. There is still a chance that investors will not panic and stop the madness selling off the stock and it will go slowly higher. Although I do not believe in it too much.

However, the implied volatility skyrocketed and I will try to take advantage of it and sell a bear call spread tomorrow morning against AMZN.

Trade Detail

I plan to open the following trade the first thing in the morning. I cannot say whether I will be able to open it. If so, it will be a great trade. If not, I will be sad, but OK.

STO 1 Jul4 14 345/355 call @ $4.75

This trade consists from the following legs:

SELL 1 Jul4 14 345 call
BUY 1 Jul4 14 355 call

I will see in the morning and report this trade tomorrow if it happens. Nothing is easy. Even the trades which started like easy money.

Happy trading!
 
 





2 responses to “New trade – Amazon (AMZN) in troubles… and my easy money trade too! Sold some calls.”

  1. I have bought/sold a lot of calls. It seems the best way for be is to do covered calls. The market is a bit sloppy, but I expect good things to come about before the end of the year.

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