fibwizard 12:45 pm on Tuesday, November 29, 2016

Market levels

Market Momentum – The S&P is 2.8% above its 125 day average. This the furthest its been above this level in 2 years.
Put/Call – Put volume has lagged Calls in the last week of trading by 35%…again a 2 year low
Stock vs Bonds – Stocks have outperformed Bonds by 7.61% the last 3 weeks, indicating a rotation from safety to Risk.

Just a few passing observations going into the holiday rally period..

optionshane 12:47 pm on Tuesday, November 29, 2016

Thank you fibwizard.
- Bobbie 4:59 am on Wednesday, November 30, 2016
  
  Thanks Wizard. I would like to know more about the SPX PUT trades where the lower
  number is 100 points away. How do you come up with the strikes. For example 2090/1990. Thanks
  - fibwizard 8:10 am on Wednesday, November 30, 2016
    
    Bobbie
    
    My trade style is to sell BUPS’s with the Short side 2-standard Deviations away from the current price..Most routine, normal days in the market, the price will possibly move 1 or 1.5 Standard Deviations..my way of thinking and making the trades is by Delta’s..a Delta 10 short put will have a 90% chance of being OTM at expiration..A delta 10 short put is also around 100 points away from the current SPX price..being 100 points away from the ATM area gives me low risk/Hi-Probabbilty wins..I usually trade 4 weeks out for the best balance of Selling premium and being safely away from the ATM price. I work at home full time, so i only place 6 trades each month, so I use a 100 point wide trade to maximize my profit with each trade. When my short put is at 60% gain or higher, the Delta will have slipped to 5..I usually buy it back for a 60% win, then sell the current Delta-12 put for the same week, and then let the trade expire worthless..
    
    Example for today – BUPS
    Sell Short 2ea Dec 30 2105(Delta 13) at 6.30 credit
    Buy Long 2ea Dec 30 2005(Delta 4) at 2.10 debit
    Gain at expiration = 4.20 x 2 = 800.00 or so..