Sold the below Puts for 1.23. A 60% ROI https://t.co/GU9Tp6iFZt— The Lazy Trader (@lazytrading) January 4, 2016
A few minutes later, new March 159 Puts were purchased to re-establish downside protection closer in time.
Bought $SPY March 159 Puts. 0.68 debit. 7 contracts.— The Lazy Trader (@lazytrading) January 4, 2016
Interesting start to the year with this morning sell off.
An SPX Chart for future reference:
(Click on image to enlarge)
So far, we have played 6 long Put positions with 2016 options and overall we haven't lost money.
The goal of these long Puts is not to become rich from them, but to have downside protection. Basically we need to be hedged against market shocks. The fact that, overall, we haven't lost money on these insurance plays is great, as they are generally a sunk cost. So far, our portfolio has been protected against a severe sell off 100% of the time at basically no cost.
The March SPY 159 Long Puts were closed for 1.68. A net gain of 1.00 per contract and a total of $700. Link to the date-time stamped tweet
If you want to learn how to buy Portfolio Insurance effectively: which strike prices to select, how many contracts, how many days out, and how to manage this insurance over time, consider acquiring LTOptions, my options trading system to the last detail.
Check out 2016 Track Record