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Tuesday, March 10, 2015

March 2015 SPX Credit Put spread

Today I entered an SPX Credit Put spread position during the morning

Trade Details:

BUY 4 SPX March 1965 Put @2.35
SELL 4 SPX March 1970 Put @2.65

Credit: 0.30 ($120 on 4 contracts)
Max Risk: 4.70 ($1880)
Days to expiration: 10

Of course the max risk will never happen as I would adjust the trade way before SPX penetrates 1970. I would be adjusting at around 2000. If I need to make an adjustment this same week I will still use March options. If the adjustment condition takes place next week then I will use April options for that.

I usually don't enter trades so close to expiration and normally I would have gone with April options, but the strike prices selection in April was too close to the April position I already have and I'm not a big fan of having all the risk concentrated on the same spot. I also considered RUT but it's looking less oversold than the SPX.

A chart for study and future reference:
(Click on image to enlarge)

Current positions in the Portfolio:
March SPX 1845/1850/2170/2175 unbalanced Iron Condor
$220 credit for the Model portfolio. Looking great. This will be a full winner next week.

April SPX 1855/1860/2200/2205 unbalanced Iron Condor
$220 credit for the Model portfolio. Also looking very good now with a higher than 80% probability of success. Lots of baby-sitting ahead but no concerns so far.

March SPX 1965/9170 Credit Put Spread
$120 credit. The new trade described on this article.

You can follow me on Twitter @lazytrading

Check out 2015 Track record

Related Articles:
Weekend Portfolio Analysis (March 14, 2015)
Position expires worthless yielding max profit

Go to the bottom of this page in order to see the Legal Stuff


  1. LT,

    You could have gone out to May expiration.

    I was able to get filled on May 31st 1775/1765 cps for .60 credit 8 minutes after the market closed today. SPX is now in oversold condition according to my simple indicator that I follow. RUT is still not oversold. Just because SPX is oversold does not mean it cannot go lower. That is why I sold cps that is very far in time and distance. I want to leave room for error. Today was a good day to 'test the waters' by selling some cps far OTM. I believe we can go lower in the next few days. There is never any rush to sell cps as there will always be a better opportunity to do it.

    You can follow me on Twitter @lienjonathan where I tweet my high probability credit spread trades in real-time for free. You can like my Facebook page and see all my open and closed trades and track record below.

  2. Thanks folks,
    I think I was a little early and usually after bearish bars that are mostly entirely body and small wicks, there's at least another intraday lower low following. So, there is some pain ahead that I am aware of. We'll see what happens. If an adjustment is necessary it won't be the end of the world and I will end up the month of March with a breakeven result. If not, nice portfolio growth. I may have made the first mistake of the year. We'll see. Thank you both for dropping by.