SKX 10/14/2016 Look Back Trade

I purchased a bear put spread on SKX as a hedge against my long covered call position that was losing money in this stock. I probably should have just closed the covered call position previously instead of working all the hedges.

I was concerned about a potential down move in SKX that would further deteriorate my covered call position. I purchased enough contracts in this trade to offset any move down and actually make my overall SKX position more profitable on a move down. Although I would have preferred SKX not move down it actually ended up helping my overall portfolio.

When I entered this trade SKX was trading at $22.92. Seven days later when I took my profits it was trading at $18.93.

In 7 days I finished with a profit of $1,152.00 on a risk of $738.00. Normally this would be an awesome trade, but remember I entered this trade as a hedge. A portion of this gain went to offset losses elsewhere. Still, I improved my overall portfolio by successfully predicting this down move.

Date

Sym

Exp

Strike

Price

C

Type

Cost

Balance

10/14/16

SKX

BTO

NOV16

$23.00

-$1.52

6

Put

-$912.00

-$912.00

10/14/16

SKX

STO

NOV16

$19.00

$0.29

6

Put

$174.00

-$738.00

10/21/16

SKX

BTC

NOV16

$19.00

-$0.95

6

Put

-$570.00

-$1,308.00

10/21/16

SKX

STC

NOV16

$23.00

$4.10

6

Put

$2,460.00

$1,152.00

Profit:

$1,152.00

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