Closing Trade – XLE Bull Put Spread

This post is restricted to paying members. To follow are specific new trade details:

Stock / Symbol: Spdr Energy ETF / XLE
Option Strategy: Bull Put Spread
Trade entry date / price: 27 Jan 2020 / $55.33
Price at this post: $54.52

Reasoning: With XLE trading above our short strike of $54, it's looking like we'll be able to let the position expire worthless and capture the trade's full profit potential. However, just to be safe, we're going to buy back the short puts to guard against a last minute decline before market close. The nice thing about ThinkorSwim / TD Ameritrade is that if you buy back a short option for $0.05 or less, they waive the commissions.

Closing Order Details:

BTC 3 XLE 14Feb20 54 puts

For a max net debit of $0.02 per contract (day order, limit order). The mid is currently at $0.02. I was filled at $0.02

Analysis:

Max Risk: $363
Max Reward: $87 or 24% with XLE trading over $54 by Feb 14th
Profit Range: XLE at/under $54 by Feb 14th

Realized Profit / Loss: $81 or 22% (pre-commissions)
Commission (round trip): $9
Suggested downside stop: $53.35

Positive Theta

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