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Friday, January 8, 2016

March SPX Credit Put Spread

The above tweets say it all. We reached an oversold condition on Thursday. I first tried a Credit Put spread with RUT but was not getting filled. I wanted RUT as it was farther from its main moving averages and has fallen more from its peak. Therefore, it is more oversold than SPX. But seeing that I was not getting filled, and not wanting to miss the opportunity, I went with SPX, with which the order was filled immediately.

Trade Details:
SELL 7 SPX March 1675 Put (@12.25)
BUY 7 SPX March 1650 Put  (@10.50)

Net Credit: $1,225
Max Risk: $16,275
Days to Expiration:71

Note to LTOptions members: The content update on why I am experimenting with these longer dated options is taking me longer than I expected. So, this Saturday I will send an email with the basic points and how I plan to manage these positions. This email will then give me time to complete the documentation.

SPX Chart at market close for future reference
(Click on image to enlarge)

Trade Update - January 27, 2016
Closed position at 1.70 debit during morning market rebound (link to time-stamped tweet). Profit is 0.05 or $35 in monetary terms for 7 spreads. Closing early to alleviate triple downside exposure in the portfolio. Only Two Credit Put spreads on after this and no Credit Call spread at the moment.

Check out 2016 Track Record

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