CHRISTMAS PROMOTION
LTOptions at a 33% discount during the Year End Holidays.
Tell me More

Monday, July 11, 2016

August SPX Credit Call Spread

Today I sold an August Credit Call spread in the SPX index:


Transaction Details:

Sell 20 SPX August 2210 Call @3.40
Buy 20 SPX August 2215 Call @2.90

Net Credit: 0.50 ($1000)
Max Risk: 4.50 ($9,000) with SPX above 2,210.50 at August expiration (38 days away)

SPX chart for future reference:
(Click on image to enlarge)

This position doesn't consume extra margin given that there is already an August SPX Iron Condor, which was unbalanced on the upside. This addition makes it perfectly balanced in terms of max risk ($16,800) and therefore, no extra capital consumed.

Trade Update - July 25, 2016

Bought 2 August SPX 2215 Calls (4.20 debit each)
Sold 15 August SPX 2055/2060 Credit Put spreads (0.30 credit each)

Total investment in the long Calls: $840 debit.
Credit received from Put spread: $450

For a net $390 debit investment, we are flattening out the T+0 line to reduce upside risk. Below is the resulting risk profile picture:

(Click on image to enlarge)
It's a waiting game now, letting that pink line move up over time. I should be able to close this position profitably by August 10 or so, if SPX doesn't reach 2210. Also, no need to adjust now at SPX 2,180. I can delay an adjustment on the Call side to 2,205 or 2,210 without incurring sky rocketing losses.

Trade Update - August 4, 2016

Sold 2 August SPX 2215 Calls (1.20 credit each. Original debit 4.20 each)
Bought 15 August SPX 2055/2060 Credit Put spreads (0.15 debit each. Original credit 0.30 each)
Bought 20 August SPX 2210/2215 Credit Call spreads (0.20 debit each. Original credit 0.50 each)

In dollar terms:
2 August SPX 2215 Calls: $600 loss.
15 August SPX 2055/2060 Credit Put spreads: $225 gain.
20 August SPX 2210/2215 Credit Call spreads: $600 gain

Net result: $225 gain. Practically a scratch when commissions are factored in, but at this point I just want to put this position behind and move on.


Check out 2016 Track Record


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

No comments:

Post a Comment