Thursday, January 28, 2010
SPY Bear Put Spread
Depending on how things open up on Friday I'm planning on buying the 106/105 SPY put spread for .29. Risk/Reward is .71/.29 = 2.4:1 I haven't decided how many contracts yet. This is just a small directional play as I think the risk is to the downside. It definitely feels like the mood has changed.
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This morning I bought those 108 puts again right out of the gate. But as downward pressure subsided I quickly sold them for a $50 gain. Looks like today could be a possible trend up day after some uncertainty was taken out of the market with the confirmation of Ben Bernake. I will see how the day plays out and if we finish on highs I may look to buy those puts back to take home over the weekend.
ReplyDeleteWell I just had a disturbing set of events. I tried to buy the 106/105 put spread I mentioned yesterday and apparently I bought the 105 instead of selling it. I actually had a chance to turn a $20 profit but by the time I could enter the order I ended up breaking even. So obviously I had to turn around and actually sell the 105's so I had my put spread on.
ReplyDeleteThen comes the second realization, for some reason I paid $1.15 per contract on all four trades this morning. I did 10 contracts so with the mistake included I traded 40 contracts. I don't understand why I was charged that much. I also had all these stupid pop up windows come up while I'm trying to make my trade. Today is the first time I traded on my new laptop so all my settings aren't saved like on my PC. They are both my fault as I'm still drinking my caffeine and trying to wake up. I've done this before, making mental mistakes because I'm not thinking clearly yet. Whatever.
I closed out my 1 contract on CRM for a -$160 loss.
ReplyDeleteIn response to your commission of 1.15 per contract. The base rate at IB is $0.70 per contract. But IB has pass through fees and fees for adding and taking liquidity. Depending on the exchange that you got executed on and if you took liquidity the charge could had been up to an additional $0.50 per contract. IB has a schedule http://interactivebrokers.com/en/p.php?f=commission. Go to the link and click options and scroll to the bottom to and click on one of the exchanges to see what the fee is.
ReplyDelete108 is a pretty important level on the SPY technically speaking. This level has held up so far, but if it breaks we could see 105 quickly after a break as this would probably trigger more selling.
ReplyDeleteIt is so hard for me to look at the market with a short bias. But you need to remain mentally agile and play what the market gives you.
I agree, unfortunately today I found myself trying to predict what was going to happen and then devise a play around it. I don't know if that's just because I'm watching full time now and trying to actively find things to play or not. My gut is telling me that top was in and to play it down now. That's why I cut the short put play on CRM and bought SPY puts.
ReplyDeleteI am still short puts on VZ but with that dividend yield I will take posession of that an sell CC rather than take a loss on a short put contract. For some reason that stock was up .09 today. One day means nothing its sure nice to see on a down day considering I'm long.
I think SPX 1050 is a certainty and this weekend I'm going to price out some other startegies around the SPX 1000 level.
ReplyDeleteOK I'll check that out, I think I remember that page from when I first signed up. It's just been a while since I paid anything more than $1.00 and seeing the $1.15 on a mistake of 20 contracts pissed me off even though it was my fault.
ReplyDeleteIf we can work through this oversold condition we are currently in, I am interested in selling some call spreads on select names. Looking for SPY to bounce somewhere in teh 110-112 area before continuing lower to around 104 where we will then have an official 10% correction. But until then I am kind of just sitting on my hands.
ReplyDeleteI did buy 1 put in PLCN.
Thats it.
I just logged on for the first time today. I had no idea what the market was doing and that helped me keep my head in the CFA books. I would like to get done every day by 5pm because I can easily get the market recap and check out options related interests as I get tired, but studying later in the night doesn't seem to work for me. I was surprised at today's move. Now that I'm currently a bear I think every day should be down. Too bad I pulled the plug on my CRM call last Friday, but if we sold off today I would be congratulating myself. My two longs didn't move today MO and VZ, so not happy. I was hoping to possibly get out of them if we rallied.
ReplyDeleteWhat is PLCN?
ReplyDelete