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PG trade adjustment, SPY & POT puts new trade

I am trying to trade longer term options trades. One of the trade I opened recently was long (April 2012) puts on Procter & Gamble (PG). Now I want to be opening short term trades against this trade to produce income. Same thing I am doing with my SLV long term holding and the same thing I will be doing with my Potash (POT) holding which has opened this morning.

Therefore I am opening the following new trade on PG: for each 1 long put contract I sold this morning the following:
STO 1 PG Dec17 2011 60 put @ 0.38

This trade executed this morning.

Based on the market move today I also decided to get back into shorting the market. Recently the market was forming a triangle and the question was which side the market breaks out. Most of the time, the market should break in the direction of the preceding trend, so in this case it should break upwards. However, the market is breaking down. If it closes below the lower support line of the triangle, we may expect further drop, which equals the height of the triangle. That means we should go all the way down to $115-ish level. However, we have two major supports on the way: 50 day SMA (brown line on the chart) and long term major support at 118 level. So this trade may be short lived.

SPY trend

However, I decided to open a new trade on SPY:
BTO 1 SPY Dec17 2011 124 put @ market

The trade opened this morning at 5.71 per contract.

I also opened my POT trade this morning.

Happy Trading!

1 response to “PG trade adjustment, SPY & POT puts new trade”

  1. Kay says:

    Thanks for sharing your trade ideas. It is great for us to learn how to trade options. Can you however explain more why you are putting on such trades? Thanks.

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