Critique my Brexit option play

V

Vijay Nivas

Totally disappointed with how results turned out and lost money. I would like experience senior option players to give me some brutal feedback and help me improve.
1. I sold a vertical put spread this Tuesday on the weekly expiry, Sold 205 SPY put and bought 203 put, trying to capitalize on Volatility
2. I was hoping for a stay in brexit but things turned out other wise and closed the position for a loss. I was waiting for recovery, but i was not happy with the way SPY is turning out.

So atleast for me the lessons on looking back are, I should have just sit this one out.
But willing to see if there is any better ways.
- Are there any other spreads for these types of scenarios?
- Any input on entry and exit timelines

Feedback from senior traders would be super useful.
 
Not a "senior" trader . . . but it seems to me you are mostly upset that you failed to correctly predict the vote. If so, this is unrelated to options per se. You essentially predicted that SPY wouldn't drop below 205 because you thought the vote would be against Brexit, and you were wrong.

With SPY at $204 and change as I write, you weren't too far off. I could see the value in assessing different options plays (maybe the 205/204 spread or a bear call spread or whatever) but let's not go too far past the fact that you predicted something fundamental and you got it wrong. (No offense, probably more than half the people are wrong on these things all the time. Certainly I am, which is why I have tried to stay away from pure event plays.)
 
Not experienced neither but ...
If I would have played Brexit -> IV !
I would have BOUGHT & not sold options.
 
I'm sorry . . . what? Were those butterflies? And when you say "sold" did you put them on for a credit or a debit?

SPX opened ~ 2040, so to profit they weren't the typical credit iron condor (butterfly). You took the opposite side? Or you got a magic fill?
 
OptionGuru said:
Hindsight is always 20/20.



:)
More...

No it's not Hindsight. I NEVER sell options.
And especially when it's about geopolitical event.
I am Payoff driven. I don't sell in front of a steamroller.
The only time I sell options is for Risk Reversal Strategies.
But you're right. Hindsight is always 20/20.
Usually I buy OTM options. That's it.
 
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What I'd say is that :
- You Played against the Swan (Brexit)
- Whereas Polls showed Conscensus = Remain
- Therefore Markets were already priced for Remain
- So ... You took risk for a view that were already priced.
- Unfortunately both you and the market were wrong ...

You reversed : Discount Obvious & Bet on Unexpected.
In my humble opinion... You risked a lot for nothing at best.
All these fact were available Ex Ante (Polls, Trend-Breaker, E(x))
 
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