On January 6th we targeted the consumer discretionary etf (XLY) for a pullback (read here) as a sort of chicken-shit way to get short exposure on some prior market leaders like AMZN, NFLX, HD, NKE, SBUX. We did so initially through put calendar:
*XLY ($76) Buy Jan/ Feb 74 put calendar for $1
After a bit of weakness we were able to roll the calendar less than a week later (here), creating a vertical put spread in February:
Action: Buy to Close 1 XLY Jan 74 put for 90 cents
Action: Sell to Open 1 XLY Feb 70 put at .95 cents
Executed the roll for a 5c credit.
New position: XLY ($74.05) Long Feb 74 / 70 put spread for 95 cents (currently worth 1.25)
Now with the stock $71.40 this put spread is worth$2, about 2x that we paid. We are now going to close the potion and look for a better entry.
Action: XLY ($71.45) Sold to Close Feb 74/70 put spread at $1.95 for a $1 gain