May 082014

SELL SPY JUN14 192 CALL @1.09
Here’s a real basic trade. You have to have tier 3 advanced options trading profile with your broker cause I’m selling a “naked call”. I don’t see the S&P 500 going above 1900. If the SPY is above 193 at Jun expiration I would lose on the trade. I’m planning on selling it within 2 weeks to make a little loot if the stock is still below 188. The index is having a lot of trouble breaking above 189 and keeps getting rejected when it comes close. As the market sells off the value of my option trade will gain value so if it drops 5-8% I’ll probably buy it back right away and make some quick cash. This is one of the most widely traded indexes so the liquidity makes the moves worth that much more. My first SPY trade, figured I’d give it a shot.


Chart below is a little better. You can see where the green bar broke the Bollinger Band and came back in. Looking for a good 5% rally over a couple days to get in on the trade but got in real late on the way down. It may go back up a bit but I’ll keep my eye out for a good drop over the week or so. I got time to bail if needed or even let it go till expiration. But the main strategy is to get out quick or half way till expiration (within 2 weeks.)

5/15/14 – SPY is falling off fast after an up move that had me on the edge of my seat. I continued to hold the position with a higher risk of having to roll or close with a loss. I will most likely close this position today for a decent profit. I put in a “buy” order in to buy back the option at around 186.40 for about half the full value of the option at expiration.

5/16/14 – Just closed out of the trade. Considering I showed my option lot size (usually won’t) I made around $250 after transaction cost. Stoked for my first SPY trade. I’ll be waiting till it pops to get back in on the down side. I won’t be trading the upside.