Apr 012015

– SOLD STRANGLE SPY 100 MAY 15 213/187 CALL/PUT @1.50
On yesterdays Trade Buddies Live show I checked out the pricing of options on the SPY as compared to a great stock like AAPL and it looked amazing to me. It was a no brainer to the effect that it didn’t even need to be in a neutral zone to get in and still be confident that the trade will be nicely profitable. The only way this trade will go bad is if a nuclear bomb goes off somewhere.  After 1 month the options at it’s same price are worth practically nothing so a %50’r should come around in just a few weeks if it trades a normal range. I like how it’s somewhat a delta neutral trade but there is lots of room for downside movement and still be safe.  Although I’ve been very bearish I’m not wanting to fight the market anymore and just go with the flow and make the it work for me.  One thing to remember is that the market is still trending upward, 45 degree angle, and may have put in a solid top, but it should bounce around right in this range unless something catastrophic happens.  The reason I say it is toppy is when I’m watching the futures action I see that not to many traders want to buy the 211 area.  We’ll see I guess…

On the chart below you can see a volume profile for 20 days worth of trading.  It has a pretty solid range and it will have trouble breaking out above that 211 area. I do expect to get tested on either side but I am completely neutral and I will ride out any bounce till it comes back to my zone and I’ll be able to get out and buy the trade back minus all that time decay.  With the short sell off here pumping the volatility a little it may help.

4/21/15 – BOT STRANGLE SPY 100 MAY 15 213/187 CALL/PUT @1.03
Stoked for my 100th trade.  I love the SPY trades and have since loaded up on them. %43 profit after commissions.  I wish they could have all been this smooth.  Strangling the ETF’s is really sweet because timing isn’t that much of a factor considering there are no earnings to worry about. The SPY’s have incredible liquid spreads so it’s easy to get in and out at great prices.  If you noticed the price rallied quite a bit but I was still able to get a great profit when usually if a stock moves that much you would have trouble getting anything if one of the sides gets tested a bit. I could have left it on but it never hurts to take some profits…