working on a simple trade set-up using SPY as the underlying, start with review of market over the week end, if market outlook is positive for week, open position near end of day monday. trade close out has several simple rules. set a stop loss target if trade goes bad if trade is positive, use a ma trail stop, watch 5, 8, 20ma close at least by end of day thur, dont hold into fri working to compare using options or leverage ETFs as the vehicle, for ETFs SSO/SDS, SPXL/SPXU. this week i used SPXL, made $300 on 100 shares
more thoughts on income trades with cash secured puts I do a simple writen plan when I put a trade on. if I am wiling to accept shares I say " ok to take shares" , I think REAL hard before I say this. Need to know when dividend dates and earnings releases, or meetings/conferences are coming. Usually do at least a 2 week out expiration. my csp trades fall mainly into 2 main groups, if I just want to collect some cash I will go further OTM and plan to close early at 50% or 80% collected, not really concerned about % roi, I just want to get the cash, target is around $50 per week per a one lot position. if I am willing to accept or roll I will go closer to the money and have a general idea of what I would do if the put gets close to ITM. also the underlying is important I like AAPL, I usually stay away from stocks like INTC for example, it has to spend big bucks to build chips that no one really knows how well they will sell.
simple weekly trade set-up using SPY as the underlying, start with review of market over the week end, if market outlook is positive for week, open position during the day monday, with either SPXL or just OTM SPY WKLY calls, or do both. if market outlook is negative for week, open position during the day monday, with either SPXU or just OTM SPY WKLY puts, or do both. with either situation, follow trades to take gains or limit losses.
SPY trades for week May 14, outlook was negative, traded SPXU, SPY 18May 270 put, and 272 put. Opened trades on monday, closed today, Tuesday. SPXU, $150 gain, 270 put, $870 gain, 272 put $750 gain, $1770 total. trade size SPXU, 5lot $4935, 270 put, 10lot $330, 272 put, 5lot $480 Next week I plan to scale back my trade size, if I can clear about $300 gain, i would be ok, plan to only trade the SPY option at one strike, and not trade the 3x ETF.
Week of 5/21 Will have to see how the apparent calming of China trade talks affect things. For earnings, the big players have all reported, still we have some interesting retailers reporting. Also Fed minutes on Wed 5/23, and a 3 day week-end, so Fri could see traders heading out early. My outlok for the market this week is for the downside, have a SPY target of 267/268. Options market pricing about a +/-$3 move, so this also ballparks my target from last Fri close of $271.33. Also see the VIX moving higher, target 14.80. Monday I will be watching 25May SPY puts, strikes 272, or 270.
for the weekly SPY trade, 25May 273 put, $.89, 2lot, think this will be a wonky week before 3 day week end.
yesterday 5/22, closed out 274 SPY call for about even, 273 put closed today, 5/23, $2.08, from now on think will just stick with the one side have most confidence in
Week of 5/28 For earnings, the big players have all reported, still we have some interesting retailers reporting. Also NFP on Fri End of month for May, and 1st week of option expiry for June. My outlok for the market is for the downside, have a SPY target of 269. Options market pricing about +/-$2.80 move, ballparks my target, given last Fri close of $272.15. Also see the VIX moving higher, target 14.80, last Fri close was 13.21 Tuesday will be watching 1june SPY puts, strike 272, or 270, for posible trade.
my take from earlier today, I will update later, options market pricing about 273 max for spy fri close, and open interest and volume saying close near 272, this is wonky week with end of month, and the first option expiry week for the new month
friday 6/1 update on SPY, from my midday notes, "option activity looks like a close under 274", actual close at 273.60