This week’s Bear Call Spread on Carvana (CVNA) closed for a full profit at expiration — but despite the positive outcome, this was hands down the worst-executed Bear Call Spread I’ve taken since I started trading 10-delta setups back in July.
What happened
The trade was opened on Monday immediately after a violent, news-driven upside gap triggered by the S&P 500 inclusion announcement. While the volatility expansion created attractive option pricing, the timing was wrong.
Price did not stall or digest — it accelerated. CVNA continued to grind higher throughout the week, pushing momentum, keeping RSI elevated, and forcing me to sit through several uncomfortable sessions where the short strike no longer felt like a distant probability tail.
From a discipline standpoint, this was not a clean setup:
No confirmed reversal pattern
No momentum exhaustion at entry
RSI was not yet stretched
News flow was still fresh and dominant
This was not a pattern-based trade — it was closer to a volatility lottery.
Why it still worked
Despite poor timing, the structure did its job:
The short strike sat far enough above spot
Volatility gradually compressed after the initial shock
Price never made the final push required to threaten the spread
Theta and probability ultimately carried the position to expiration.
The lesson
The correct entry for this spread would have been Wednesday or Thursday, once momentum started to slow and the market had time to absorb the headline. Entering on Monday exposed me to unnecessary stress and drawdown risk — even though the trade finished green.
This is an important reminder:
patterns first, headlines second.
The goal of this strategy is not to guess outcomes, but to align entries with statistically repeatable structures. When I deviate from that, I turn a high-probability setup into an emotional endurance test.
I’ll take the profit — and the lesson.
Trade Recap
Structure: Bear Call Credit Spread
Expiration: December 12, 2025
Strikes: 480 / 490
Contracts: 12
Result: +100% of credit
👉 View on OptionStrat
👉 View in Trade Log
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Disclaimer
All content is for informational purposes only and does not constitute financial advice.Any trades or strategies should be tested in a simulated environment before use.Trading involves risk, and all decisions are the sole responsibility of the reader.
Appreciate the honest and straightforward reflection, Mansur. Keep up the good work learning “out loud” and being transparent!
Joined in a similar vein later on Monday after watching it for a bit, for a 487.5/490 spread at .21 per contract.
I sold 3x 480-500 bear call spreads expiring today for 1.65 ea. After running up 33% into Monday who would have thought there was so much gas left in the tank? Was on edge for the first few hours of Friday's open. CVNA is one heavily manipulated sob ... but looks like it's turned over & headed back down.