The trade executed with the stock price at $53, down 1.7% from the opening price. The options went for a $1.10 credit, or a 36¢ profit. Only in the world of options can a declining stock still produce a profit on a bull position.
The options, short the $52.50 strike and long the $55, out to a 48.6% gain.
I opened the position on April 5, so not too shabby for four days work.
The post when I opened the position, and the original analysis.
Market analyst Kenneth Posner creates a new framework for managing extreme risk based on lessons learned in the recent collapse of capitalist finance.
I've got to say that I'm slightly shocked by the whipsaw. Before today's bear signal, the chart shows three days in bull phase, two in bear, 13 in bull, one in bear, and then another long string in bull.
With a strong uptrend and an average directional index of 38, this whipsaw is quite surprising.
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