FB stock has room to drop on weekly - swing puts

The gray lines on chart mark a channel. Price should move to bottom of channel, and then we see if it breaks lower or moves up. On RSI you can see two failed tests at 50, and looks bearish for now.

I bought 18Feb 290 puts.

Trade closed manually

Closed my puts. Today we have the selling volume and directional selling that indicates a bounce may happen. Also it is monthly options expiry so strange things can happen in the afternoon. While I do expect more downside, I wanted to take profits with these two days of market drop and higher IV (higher VIX means higher option prices).

Note

I am sharing a mistake so hope it helps other traders. My expiry was 18 Feb so I had plenty of time to wait for price to touch the bottom of channel and even break lower, which is what I expected to happen. I was happy with last week's trading results and sold all of my puts on Friday instead of making a partial exit. I missed a whole lot of profit on this trade, not out of greed, but because I poorly executed a great trade idea. The lesson: If you have time in your options, then use it to your advantage and be patient as long as your trade idea is still valid.

OptionsRising

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OptionsRising