Closed January SMH bull put spread +5.3%

I've closed my January bull put spread (p27.5/-p29) on SMH with the underlying at 27.95, for a 5.3% gain on the underlying and a 5.6% gain on the vertical spread. The position was active for 18 calendar days.

I closed eight days before the options expired because the chart showed a number of bear signals this morning on a 1.2% decline from the opening to the low point. The pps, macd and stochastic all agreed (with the stochastic having turned bearish four days earlier -- a nice lead).

The price had pulled away from a gently rising upper Bollinger band three days earlier and was midway between the band and the midline. That pull-away would have been a sell signal if the stochastic was being used for confirmation. Otherwise, no cigar.

Topics: semiconductors