On April 30th, I entered a zero-day SPY 535 PUT at 09:56 AM for $0.69, expecting continuation to the downside. I exited at 10:15 AM for $0.28, locking in a $41 loss.
The Setup
I was watching SPY break down early in the morning and believed momentum would continue. But by the time I entered, price had already bounced off lows near 546.50. The reversal began forming higher lows and pushing toward the 9 EMA.
As seen in the chart above, my entry was late in the downward move. The trade happened right before the reversal leg that pushed SPY toward the red 200 SMA. The bullish candles stacked and invalidated the bearish structure quickly, leaving me on the wrong side of the trade.
Key Mistakes
- Chased weakness after the initial morning drop had already played out.
- Struck too far OTM with a 535 PUT while SPY was still trading near 546–547.
- No clear rejection candle or engulfing pattern at entry.
- Held too long without a clear breakdown — 19 minutes against a reversal cost me premium fast.
Adjustments Going Forward
- Wait for strong reversal setups (e.g., bearish engulfing under VWAP or 5 EMA).
- Trade closer to-the-money options with Delta 0.5–0.7 for more responsive price action.
- Size small and cut quicker if the first few candles don’t go in my favor.
Every loss is a lesson. This one reminded me that timing > bias. The market doesn’t care about my expectations — only my execution.