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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

3 comments:

  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.

    https://www.facebook.com/pages/Create-Monthly-Income-Fund/857243867661638

    https://docs.google.com/spreadsheets/d/1xpG88wxQeoAKyIik3OKhbxbS3qInINGaa4Boxzp5HEY/edit?usp=sharing

    ReplyDelete
  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.
    LT

    ReplyDelete