We are up 50% from the recent 12.80 low from 10/28. So we are now on notice for a second signal. With one signal fired, we should now proceed more cautiously on put spreads.

Since I had a few spreads threatening if we gap down tomorrow, I closed one before the $3.00 stop was hit.

Bought to close $SPX Dec 11th 1940/1915 put spreads for 2.70. Sold for 1.25 on Monday.

BTC for 3.00.

This week I’m selling spreads in Dec 11th expiry, and with the down open I will look for a put spread in the first half-hour of trading.

Replacing the 2095 calls I had to close this morning for 4.70.

Sold to Open Nov 13th 2020/2040/2125/2145 iron condors for 3.00.  1.66x position size.

#SPXcampaign  BTC $SPX 2095 Nov 6th short calls for 4.70.  Missed my shot to get out below 2.00.  Action looks bullish, so not risking the possibility of  ending the day above 2100.  Will look to get a few cents extra by selling the long 2120 calls if I can.  Also will look for a roll candidate spread.

Looks like downside could be finished
TICKs still bearish, but $SPX moving up

#SPXcampaign Sold to Open $SPX Nov 6th 2075/2060 put spreads for 1.00.  More available now, but you’d have to act quickly.  Stop is at 3.00.

Closed for 18.60. Will look to replace with another aggressive spread tomorrow or next week.

I am planning to close at least one of my threatened SPX call spreads before the close, and it will probably be the ITM Nov 6th 2075/2100 that I sold on Monday.  The reason is, if we move higher on the report, this spread will become completely ITM, cost 25.00 to close, and will be very difficult to roll (since you cannot get 25.00 for ITM spread that have time premium in them).  If you followed me into that spread, consider this to avoid the chance of ending higher than 2100 tomorrow.

#SPXcampaign STO Dec 4th $SPX 1940/1915 put spreads for 1.25, with SPX at 2092.  This is the second and final put spread for the week of Dec 4th.  I have one call spread remaining to sell for that week…  possibly wait for next week if we get no more upside move this week.

This condor I sold yesterday is now going for about 3.30. The call side premium is the same, but put premium has increased. If you didn’t take the trade, you can get more now, or move your strikes farther out.

#SPXcampaign Sold to open $SPX Nov 13th 2025/2050/2150/2175 iron condors for 2.80, with SPX at 2110.  This is another roll spread to make back some losses from stopped call spreads.

#SPXcampaign Sold to Open $SPX Dec 4th 1950/1925 put spreads for 1.25.  First of two put spreads I will sell this week in the Dec 4th expiry.

It may not be much of a morning dip, but it is time to sell a put spread for the Dec 4th expiry (5 weeks out).

This is panicked buying and/or short selling.  First of the month could also play a role.

This is a difficult move for the SPX strategy.  I am remaining patient and will wait for the pullback.  If one does not come, I will work any ITM positions to move them to higher strikes with market swings.

The key is being comfortable holding these positions for many days or weeks. If it does not affect your ability to enter other trades, then patience should prevail.  If it does limit you, then you should probably avoid ITM rolls completely.  If you sold the one this morning, I would still wait for a swing low this week to exit near break-even.

Feel free to comment here or email me if you have questions.

-JP

#SPXcampaign Bought to close $SPX Nov 19th 1860/1835 put spreads for .20.  Sold for 1.25 on Oct 19th.

This was a fill on the GTC order I placed immediately after selling the spread on the 19th.

#SPXcampaign  STO $SPX Nov 6th 2075/2100 call spreads for 14.55.  Rolling from the 2070/2095 spread closed Friday for 14.20

#SPXcampaign Sold to Open SPX Dec 4th 2170/2190 call spreads for 1.25.

This is the first of two call spreads and two put spreads I will try to sell this week for the Dec 4th expiry..

This week, I am looking 5 weeks out as usual and selling spreads for the Dec 4th expiration.  As Monday mornings are usually great for premium selling, I am starting with the Dec 4th 2170/2195 call spread for 1.25.  Order is in, I will wait for a fill.

When we get any kind of down move, I will try to sell Dec 4th put spreads.

Friday, I had to close the Oct 30th 2070/2095 spread for 14.20.  I did not get to sell another ITM spread to replace it, so will look to on up moves today.

Allowing a spread to get ITM is not ideal, but I have on occasion allowed it to happen with call spreads. When SPX feels toppy, as I feel it is now, it is pretty certain that we will be below current levels at some point in the near future.  Therefore, you can roll an ITM spread each week until you get the pullback.  I did not try this on the move up from 1900 to here…  VIX was plummeting and we were screaming higher.  But once here, near 2100 and not far from all-time highs…  the VIX has stopped dropping dramatically, so I feel comfortable with it.

Again, not ideal, and many will not be comfortable with 10-20 dollar spread in their account. But if you employ patience, it can become easy.

But best bet is just to use more disciplined stocks and get out long before ITM happens, then roll at more comfortable prices.

#SPXcampaign BTC $SPX Oct 30th 2070 calls for 14.20. Letting the 2095 long calls expire (unless we get enough rally to sell them). Will roll before the bell into an ATM or ITM spread expiring next week.

The $VIX hit a low of 12.80 on Wednesday (10/28).  So unless and until that low is breached, this is the level we monitor to look out for the first Danger Zone metric:  50%, 100%, 150%, etc, UP from 12.80.  So set an alert for VIX 19.20 (50%) and VIX 25.60 (100%).  Also, watch for the 2nd metric, which is 25% or greater 1- or 2-day increase from any day’s close.

#SPXcampaign Sold $SPX Nov 6th 1995/2020/2130/2155 iron condors for 1.90. 10 delta; part of rolling needed for stops taken in call spreads.