Hello Hive,
Hope you are doing well. :)
Here's my trade from yesterday..
The market was falling all morning, since the previous day actually. The pic above is the marketwatch indicator from my broker. It shows the recent past price action. Green is up and Red is down. There are also different shades of each color, but you can see that the market overall was falling (red) with only a few stocks that were rising (green).
I gave the markets an extra 30 minutes to see if it would start to level off, but it not only continued to fall, but I was seeing even more red.
I decided to enter my trade.. a call credit spread (CCS). It profits if price ends, at expiration, anywhere BELOW the strike price sold. In simple terms, it wins when/if price falls.
and here's what it looked like on the chart. (I draw in those dashed green lines to show me roughly where my stop is at that time, so I this trade, I wan price to stay below it)
Here's the trade as market went on..
I took this snap to show the strikes' delta (the chance of getting hit. the lower the better)
and finally, here's how it ended..
(BTW, when the stop is right in the middle or at the market price, that is what my broker does to show that it's not even close to stopping out, so they don't bother tracking it)
OK, so the final result was the trade expired worthless, meaning I got to keep the full credit for selling the option..
$50 x 2 contracts sold = 100 - 4.38 (fees) = 95.62
I know it might be confusing to some people, so feel free to say any question or comment.
:)