9/7/18: 

Chevron (CVX) Put nets over 1,700% gain

 

Wednesday’s price action in Chevron posted a reversal bar with a slightly higher close than the prior session.

 

Thursday morning saw the opening in CVX gap lower into the prior day’s range; a gap that was determined in real time to be too low. That lower open put probabilities of a reversal failure on the table.

 

As price was struggling higher to close the opening gap, a short position was opened with CVX 9/7, 117.00 Put at 0.18.

 

The trade was executed just seventeen minutes after the open at 10:47 a.m. EST.  Price action made its high just five minutes later.  The prior day’s reversal bar began to fail.

 

Once price action broke below the prior session low, it began a relentless decline into the close.

 

A trading channel was observed on the hourly chart of CVX (not shown) and the decision was made prior to the open today, on Friday to exit the trade based on price action.

 

That exit occurred just two minutes after the open as price accelerated lower into the hourly channel.

 

Exit price on the 117.00 Put was posted at 3.32, representing over 1,700% gain in two trading days.