1/17/25 Locking in Profits: Closing HIMS CSP for a 75.88% Gain
Securing $604 in profits as HIMS approaches key resistance and expiration, optimizing risk-reward in this deep ITM position.
🚨 Trade Update 🚨
Hello everyone, I’m closing my $HIMS Jan 24 (7D) $26 Put position today to lock in a $604 profit, which represents 75.88% of the maximum potential profit. Here’s why this is the right time to take profits:
Why It Makes Sense:
1️⃣ Approaching Expiration
With only 7 days to expiration, this position is nearing its expiration window. Holding it further increases assignment risk, as the contract is deep ITM (delta of 100.4). By closing the trade now, I avoid potential assignment while securing a substantial gain.
2️⃣ Strong Profitability
I’ve already captured $604 in profit, which is 75.88% of the maximum gain possible for this trade. At this level, holding further exposes me to unnecessary risk while providing minimal additional reward. Taking profits here is a textbook example of locking in gains at the right time.
3️⃣ Approaching Resistance
HIMS is trading at $28.03 and nearing its $28.89 resistance level. While the stock remains in a bullish trend, resistance could cap further upside or lead to a potential reversal. Closing now ensures I secure profits before any unexpected moves near this key level.
4️⃣ Risk-Reward Optimization
This trade has delivered significant profits, and the risk-reward ratio no longer favors holding. The IV Rank (41) and favorable trend worked as planned, but with limited time left and the position already ITM, it’s prudent to take the money off the table.
Key Numbers:
Profit: $604
Percent of Max Profit: 75.88%
Time to Expiration: 7 Days
Stock Price: $28.03 (near resistance at $28.89)
💡 Takeaway: This trade delivered strong results, and taking profits now maximizes the reward while minimizing risk. The combination of nearing expiration, approaching resistance, and locking in 75%+ of the max profit makes this an easy decision to close the trade. Remember, it’s not about holding for every last penny—it’s about managing risk and being consistent!
*Disclaimer The examples in The Options Oracle are my opinion, not financial advice.
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