Trade Update $SPY: Spreading Nov 142 Puts, Wham, Bam, Thank You Bam

by Dan November 7, 2012 10:06 am • Commentary

Trade Update Nov 7th, 2012 at 10:06 am:  With the SPX down about 1.5%, I am going to turn my Long SPY Nov Put Purchase from yesterday into a Put Spread.  BY selling the lower strike Nov 140 strike puts at what I paid for the Nov 142 puts yesterday I can’t lose on the position and have the opportunity to make $2 if the etf is 140 or lower a week from today, that is less than 1% from here.  I like those odds.

Action: Sold SPY ($140.80)  Nov17th 140 Puts at 1.22
New Position: Long SPY Nov 142/140 Put Spread for No Cost.

Break-Even on Nov17th Expiration:

-Porfits btwn 142 and 140 of up to 2.00, max profit of 2.00 at 140 or lower.

-Losses, Impossible!



Original Post Nov 6th, 2012 at 3:03pm:  New Trade $SPY: From Decisive to Divisive

Not too much new here, but I am not really sure why we are up 1% today, possibly because it is becoming increasingly clear that we won’t have a stalemate in the presidential election? As I said this AM, I think we will likely go from a decisive victory tonight to a divisive “fiscal cliff” debate for the balance of the year in the Lame Duck Congress.  I think there is a decent chance of near term weakness under this scenario.

New Trade: SPY ($143.11 ) Bought Nov17th 142 Puts for 1.22

Break-Even on Nov17th expiration 140.78

– I will look to leg into a put spread on any weakness.