It was an unusually quiet day... but even in quiet days normally we can place trades that are exciting.
On 12/08 I sold Sep $30 naked put against SHOP and since then, the price kept going down. I thought I would double down on my bullish stance by buying a call vertical for more or less the same amount of credit that I received for the put.
Long Call vertical: buy a call option at a certain strike and sell a call option at a higher strike. These trades are debit trades, which means they require cash, not just capital. Goal: if the price goes up enough then this trade becomes profitable. As an option trader, I use these types of trades when I am doubling down or hedging against another position.
In this instance I doubled down as if the price keeps going down than it will hurt my portfolio even more but if it bounces back then I will win big time. Note: I am safe above $30.
SHOP Daily Chart
Trade Type: Long Call Vertical
Strike: $$36.5 / 37.5
Expiry: 16 Sep
IV Rank: 54.3
Cap Req: $49
Annualised Prof at Expiry: ?
IMPORTANT: Studying previous trades provide the opportunity to everyone to learn a great deal so I encourage you to click on the links below and digest the info.