FB DBL DIAG Sell135/buy145 Call, Buy130/sell125 Put 21 APR 17
Table of Contents
Facebook (FB): Lost Trade
-
Risk to Reward
-
Trading Apgar Test
-
Trading Result
Summary
The weekly chart was in uptrend and the Trading Apgar test was below 4 points. This trade had a bad setup and bad entry point.
Trade Overview :
- Company: Facebook (FB)
- Strategy: Double Diagonal to Short
Reason for entry
When the trade was placed, the price was around $133.50.
Weekly chart is showing up-trend but daily chart is showing weakness. Setting up a Double diagonal to catch a quick profit trade. Some cushion is incorporated so even if the stock goes up few dollars it will be fine. As long as it does not shoot up too much.
Entry setup
| Date | 2/15/2017 |
| Symbol | FB |
| Reason | Long term chart is showing down turn. Expect it to keep going down a bit more. |
| Action | FB DBL DIAG sell135/buy145 Call, buy130/sell125 Put 21 APR 17 |
| IV | 0.195 |
| HV | 0.157 |
| Direction | Sell |
| Short Squeeze Float % | 1% |
| Exit point lose | $ 350 |
| Max win | $ 910 |
| Early exit point | $ 550 |
| Prob Touching | 68% |
| Prob Win | 32% |
| Return | 260% |
| Good / Bad (exit point) | Good Trade |
| Money held | $ 2,573 |
| Prob lose ITM | 40% |
| Prob win ITM | 60% |
| Rward ratio (based on money held) | 35% |
| Good / Bad (money held) | Good Trade |
| Win / Lose overtime (exit point) | 53.2 |
| Win / Lose ratio | $ 0.15 |
| Win / Lose overtime (max lose) | 483.20 |
| Win / Lose ratio | $ 710.59 |
Charts
Trade Apgar Test
Any trade with Apgar test score below 6 should be avoided.
| Expectation | Short | Score |
| Weekly Chart | EXP MA | 0 |
| MACD | 0 | |
| MFI | 1 | |
| TTM | 0 | |
| DMI | 0 | |
| Daily Chart | EXP MA | 1 |
| MACD | 1 | |
| MFI | 0 | |
| TTM | 1 | |
| DMI | 0 | |
| Total Score | 4 |
Trading result and after thoughts
It reached to the early exit point and got stopped out. As of today (3/10/2017) the stock price is at $138.79, which is way beyond the stop loss point. I am glad I got out at the early stop point.
At the time of this trade, I did not have Trade Apgar Test in place and it clearly indicated this was not an ideal trade.
My primary option trading strategies incorporate volatility and I am constantly experimenting with various trading strategies to improve my PNL.
I hold two Master’s degrees (MSc and MBA) with career experience as a cancer research scientist and a digital marketer.
- Thanks, FOMC Meeting. Here We Go Again –VIX & SPX Review 11/5/2022 - November 5, 2022
- The Market Bottom, For Now – VIX & SPX Review 10/23/2022 - October 23, 2022
- Wow, CPI Data Wild Ride! – VIX & SPX Review 10/16/2022 - October 16, 2022
Leave a Reply
Want to join the discussion?Feel free to contribute!