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Wednesday, November 9, 2011

December SPX Bull Put Spread

I opened the first position for December expiration as follows:
Sell 5 SPX December 1105 Put (@12.10)
Buy 5 SPX December 1100 Put (@11.50)

Credit received 0.60
Maximum profit = 0.60 * 100 * 5 = $300
Maximum Risk = $2200
Days till expiration 37

(Click on Image to enlarge)

Probabilities of success seem comfortable right now at 85.83%. And the markets would have to fall more than 10% by December 16 for this trade to be threatened. In spite of Europe debt issues and all that, probabilities clearly look good here.

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