Looking for some insight into my most recent trade. What worked, what didn't, how I can refine the pseudo-strategy I used to "guarantee" profit despite Robinhood limitations on day trading. Specific criticism is appreciated.
Some Info:
-New to the stock market -Small account, started with 1000 a month ago. Was at 1600 this morning before the trade. -I don't have the buying power to sell calls and puts. -Robinhood limits day trades to 3 within a 5 trading day span. If you exceed this you get flagged and locked out for 90 days. I've been reserving day trades for only the best scenarios.
The Trade:
$BZUN - spiked pre-market as a result of earnings call. Opened at 47.50 (+5.42%) . I opened a 55 call buy 6/15.
At roughly 52.00 (+16%) I opened a 50 call put 6/15 to "lock in" my gains, since I only have 1 day trade available to me.
At 53.25 (+18.17) I closed my 55 call 6/15 for gross 230.00 using my last available day trade.
Currently sitting on the 50 put 6/15 at -110 and the BZUN is holding between 52.50 and 53.50 (+17-19%).
I believe it's more likely to end the day in a small pullback than rally again, allowing me to sell my put tomorrow for a net profit of 110-130.
Edit: I realize a naked call would have been the easiest path, and more profitable, but I wanted to test this method for instances where I do not have day trades available and I have to hold both the calls and puts overnight. I only sold the call because I strongly believe there will be a small reversal. I took profits on the call at their perceived height for the day, and I'm treating the put as its own trade now.
Submitted May 17, 2018 at 11:43AM by MisterOdachi https://ift.tt/2L8WxvT
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