Daily Spy Trade - options day trade.

Note* do not plan a trade or trade UNTIL the open.

What worked - calculated IV ranges. Played off IV ranges.

1) Initiated 210 feb call position at 0.39
2) Closed 210 Feb call position at 0.48 for net profit of 20%.

SPY movement
1) opened lower to 0.75 STD move, where I took my position.
2) rebounded to 0.5 STD move. sold position for 20% return.
3) continued to 0.25 std level from mean.
4) continued straight to mean start point. looks like a 3 day test of resistance

Rule if Drop by X at open, expect a rebound to X/3 x2
example: Drop to 0.75 level divide by 3 = 0.25; x 2 = 0.5 level.

Charts:Used 1 min and 3 min

Future play:
1) Lay out hourly and 1 day IV ranges. Broken down into 0.25,0.5,0.75,1 STD moves.
2) expect moves of 0.25 through out the day on 1/3min chart (needs to be tested further)
3) take profits at 0.2 std moves
4) take position at known IV level. long when stochastic 1 min chart is low and stock is at IV level.
5) stop loss and let trade run. I think a range between 50% to 25% depending on IV rank would be suitable. need to examine.

Stats for current trade:
IV rank 0.39%, IV 13.40%
- below 50% , prices not too inflated.
- set stop loss to half of expected (not realized) gain.

For example, if spy dropped to 0.75 std level, and stochastic is at low. expect a move to the 0.25 level. Set stop loss to the price equiv to the 1 std level.

However, with this trade, hold it to expiration and see how it plays out. expect a max loss.



If move 1 0.25 level, expect a second move to next 0.25 level after open.