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Getting short in BABA (Vertical Spread)

This is a directional play, BABA looks over extended and I think we will get a move back to the 20 EMA or even lower sometime between the next month. So I sold a Call vertical spread for $2.25 ea .

This is a directional play and is basically a 58% probability of making money. Our max loss is $275 per contract and max win $225. Will look to close it early.

The trade: (Vertical Spread)

-1 175 Call
+1 180 Call

58% probability
Giao dịch được đóng thủ công: During this time there was a major hurricane hitting where I live, so I wasn't able to update this trade. It expired with a small loss.
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I am very new at this and do not understand most of what is being said. :( I am on a steep learning curve. I do have stock in BABA. Are you saying its going to drop and I should sell? I am currently ahead.
Phản hồi
@TLynneD, Hello. Stocks are always moving up and down and its very difficult to predict the exact top or bottom. In the case of BABA I am just trading for a short time period (I don't care what BABA does in the long term), betting that there will be a correction (even if later on continues to go up). I am also trading with options (using less capital than buying/selling outright), so I don't own the stock and know exactly what is my risk and how much I want to get out of the trade.

Knowing that you are new to this, I can give you some suggestions:

1. Don't follow what other's say to make a trade. At the end only You are responsible for the decisions and no one cares about your capital more than You.

2. Trading with options is way better than trading stocks (more efficient use of capital and better probabilities and chance to make Your money Grow). If You want to learn about options, there are free resources with a ton of information that can help with your learning curve (you can send me a private message and I will gladly help pointing you in the right direction).

3. For every trade you should have a plan, know when you want to get out either to take profit or what to do if things go wrong. The psychological part of trading is what will give you the most trouble, so having a plan will help to stay the course and not make decisions based on emotions.

Hope that helps!
Phản hồi
TLynneD AlexanderGotay
@AlexanderGotay, Thanks so much. I started in stock and that is what I am currently dabbling in but I am switching to Options but completely lost. So yes I would appreciate a good starting learning resources.
Phản hồi
i agree, i have a bear call spread with the 167.5/162.5. BABA RSI is overextended needs to drop back to at least the middle bollinger band in the next week or so.
Phản hồi
@synthius, Yes, we are in the same boat then. Hopefully moves soon and gives us a nice profit. Good Luck!
Phản hồi
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