At a point where only 28% of stocks were above their 20 SMA and the McClellan Oscillator was below -170, I figured we were near a Bearish extreme. This is the trade:
Buy 11 March SPY 159 Put @0.77
Sell 11 March SPY 161 Put @0.90
Credit received: 0.13 ($143)
Max Risk: 1.87 ($2057)
Days to expiration: 53
Current IV Percentile is 69% and the VIX is 17.42.
SPY closed at 178.01 today. This position is 10% bellow that.
An SPY chart after market close for future reference.
(Click on image to enlarge)
Moving on to the RUT 1040/1050/1250/1260 Iron Condor
A few minutes after the SPY trade I placed an order to close the Call side (1250/1260) of the RUT Iron Condor. This Iron Condor was initiated just four days ago and the Call side was showing a nice profit (75% of the maximum potential profit). I thought, with 53 days to go until March expiration, it only made sense to close that spread and reload down the road once the market rebounds. Chances of a rebound increase the more oversold the market gets, and in 53 days, it is very likely that we will see some kind of rebound. I was dragged into a meeting, and couldn't tweet this trade or anything live. Only when I came back I realized I'd gotten the fill.
Buy to close 2 RUT 1250 March Call @0.75
Sell to close 2 RUT 1260 March Call @0.55
Net Debit: 0.20 ($40)
This Call spread was open for 0.80 credit. Closing it for 0.20 debit represents a 0.60 profit ($120) in just four days.
After today's two transactions the portfolio looks like this:
February RUT 1040/1045 Bull Put Spread $120 credit
March RUT 1040/1050 Bull Put Spread $120 credit
March SPY 159/161 Bull Put Spread $143 credit.
Plenty of downside exposure. Not a fan of that, but decent distance so I don't feel threatened by now. The market's reaching short term oversold conditions, so I believe the downside is starting to look limited in the short term.
Check out 2014 Track Record
Weekend Portfolio Analysis (February 1, 2014)
Weekend Portfolio Analysis (February 8, 2014)
Weekend Portfolio Analysis (March 1, 2014)
Weekend Portfolio Analysis (March 8, 2014)
Weekend Portfolio Analysis (March 15, 2014)