The original trade was a bear call spread with 225/230 as the strikes for 1.40. This entire week LNKD has been trying to chug past 225 but has been running into some resistance. It's STILL reading as overbought on the RSI and had a negative MACD cross this week, which is typically a sell signal when the RSI > 70.
On the 25th I converted the spread to an iron condor, selling the 200/205 put spread for 0.70. The trade isn't a profit-seeking trade anymore, it's a loss-reducing one. By converting this to an iron condor I was able to take in more credit without taking any additional risk. Already the losses on the trade have been nearly cut in half, even though LNKD has done next to nothing this past week. In the last update, the trade was down
-$200, and now it's down -$108.
Next week if LNKD moves higher or remains stagnant, the puts will have to be rolled up, again allowing me to take in more credit. What I expect to happen is a small pull back to the 215-218 area which will allow me to exit the trade near unscathed. It just seems a little tired to me, so a breather will be required before continuing past the next area of resistance at 230. Fortunately, theta will begin to take its toll on option premiums next week, which will work in our favor regardless of where LNKD moves.
As for the future of my trading, it's going to be light. This semester is going to be "labor intensive," so I won't have as much time for proper analysis and execution of trades. This year has already been immensely profitable compared to last year, so to me there's no rush to get back in.
In addition, the markets right now are... well boring. There are no stocks on my radar that meet criteria for trading in my methodology, and stocks are unsure of where to go. While S&P 2000 is technically meaningless, it has a psychological effect. We've come so far, and the only thing that participants say will take us higher is the fact that rates are going to remain low. That doesn't sound enthusiastic to me, so we will probably churn higher until inevitably another mini sell off comes and everyone succumbs to BTFD again.
Abenomics is failing in Japan, ECB is about to unleash QE, US housing is struggling... the world economy looks awful, and yet here we are. While I'm not bearish on stocks right now, I don't see any reason of owning them way up here in the nosebleeds. Sure, they will probably go higher, but at what risk? SPX may reach 2100 by the end of the year, but it was quite a long fight to go from 1900 to 2000, unlike in 2013 where every other month was another 100pt move. Not only is complacency rampant in this market, but so is apathy. Unfortunately, I care too much!
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