October 14, 2016
Call credit spread: In this video, we’re just going to go quickly over the one closing trade that we did have today in OIH. We were able to buyback this spread. We tried to do it yesterday but didn’t get filled in the order. And we're a little bit more aggressive than just the 50% profit just because oil has been moving down lower.
But we were able to close out this spread, all five of our vertical call credit spreads for a $10 debit. It means we took a nice $100 profit. And honestly, we’ve only been in this trade for about five days. We sold this thing back on the 23rd, and now today would be the fifth or sixth day here, six days that we’ve been in this trade, so a quick trade.
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All we were trying to do is just take advantage of the continued downward movement in OIH. Implied volatility stayed the same. It has gone up a little bit, but where we made the money on this one is with the drop in the stock price and the fact that we’ve gotten just a little bit closer to expiration since we traded those front October contracts.
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I’ll be honest in saying that I think OIH is setting up to be another play, potentially playing it towards the bullish direction, but out in November. Since we have earnings coming up starting tomorrow, we’ve got a lot of things that we can trade around earnings with high implied volatility; there’s going to be very few opportunities to trade some of these ETFs that have high implied volatility.
And I think OIH is going to be one of those opportunities that we can play now towards the other side of the market, selling maybe a put spread below the market or a naked put or something like that. Obviously, we’ll keep everyone updated with any new trades that we roll out here in the next couple of days.
Alright, if you guys have any other questions, please let me know. Until next time, happy trading!