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BookingAlpha Option Trading Advisory

Thursday, March 6, 2014

Closed March SPY 191/193 Credit Call spread

Today I closed the March SPY 191/193 Bear Call Spread for 0.33 debit.

The spread was originally entered for 0.16 credit so this is a 0.17 loss or $187 in 11 contracts. I did this in front of the jobs report of tomorrow. Obviously, SPY shouldn't hit 191 just like that tomorrow. But even if it goes beyond 189, which is pretty close, it would be a real headache for me.

So, I closed the position for a small loss. If we rally tomorrow morning I will consider entering an SPX 1930/1935 Spread in March. If we sell off, then I won't do anything and in spite of the losses this month, there is still potential for a positive March come expiration.

These are the current positions in the portfolio:
March SPY 159/161 Bull Put spread. $143 credit
March RUT 940/950/1240/1250 Iron Condor. $460 credit.
April RUT 1080/1090/1280/1290 Iron Condor. $480 credit.

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  1. This sounds like a wise move. In the future, I will hesitate to sell bear call spreads just because I think the market is overbought. It can stay overbought for a long time. I prefer selling bull put spreads over bear call spreads due to many many reasons we have discussed in the past. Let see what happens tomorrow.

  2. It's not the end of the world Jonathan. I think trying to design a system that wins 100% of the time is impossible. Losses will exist and this was a manageable one.
    If we rally hard after the jobs report in a few minutes, I will sell Calls again, but farther out.