NSP dropped 8% this morning after posting earnings so I closed my short position at a nice profit. NSP ended up dropping over 14% later in the trading day so in hindsight, my closure of this put spread was premature. However, my trading strategy has rules in place for taking profits, and my profit target was hit at 8% drop level this morning, so I took profits then. This profit level I use tends to act as a solid bounce point, sometimes permanent, so over the long run it will make more money to use it. Here is the trade summary:
Sold to close NSP Aug 19 70/80 put spread at $6.25
Bought at $4.13
Profit of $2.12, +51%
ORIGINAL TRADE SETUP...
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PLEASE NOTE: THIS IS AN ELLIOTT WAVE BLOG EXPRESSING AN OPINION AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. TRADE AT YOUR OWN RISK.