SPX - Tired but supported still

FX:SPX500   S&P 500 Index
462 16 7
The area 2040/2005 is not trivial to break to the downside.

Conversely when it does break (and it probably will), it will significantly crack the bull structure.

There shall be rebounds after that but the market will be unlocked then.

My view is:
- The bold black line shall retain.
- As the consequence, the red dashed line shall be broken in the next few weeks.
- Theoretically, SPX             could also stay many weeks beteween 2120 and 2040 but I had the impression 7 weeks was enough already. Let's see.
hi, recently played with parallel lines in fdax, this one is spx index, cboe
looks to me that spx is about to leave yellow ascending channel and could test 2030 trendline
YaKa look4edge
Think so too but we have to appreciate the SP500 have had many lives so far... but yes question of times.. if not here in a few weeks...
sure, the point was, that maybe current correction could be stopped at 2030, lets see
So what do you expected if 2040 doesn't hold? Can we drop all the way to 1990, 1980 or 1890? I which I knew the time frame if any such thing happens. I struggle with, for example, identifying a trend seeing let's say we stay above 2040 as it may hold, so I place my weekly bull put spread as low below 2040 as possible, which at current prices would be 2010/2015 spread collecting 0.30 credit. And next week the market crashes violently smashes thru those strikes like a knife through butter and I am left with a full loss and I have to roll the trade or reversing it into a bear put spread to salvage it and not collecting a full loss. This happened to me several times this year. Is there any way to minimize this (I do not want to say avoid as I think it is impossible, but eliminate as much as possible)?
YaKa Martzee
The best way to protect yourself is to stop selling options that may be triggered and of which you would not like the induced new position.

There s no free lunch.

Here, I am expecting the market to fall through 2040.. potentially next week.
My opinion: you sell options when you dont mind getting exercised. HERE, i would sell calls 2140 expiry June because i dont mind if the spot goes there.
I understand that 2140 (I saw your previous free credit trade). What I am trying to do is to learn and be able to sell weekly options every week against SPX. I know it's hard, but I believe possible. If I sell June, I tie my money for that long and I do not like it. I do it, but wish to have weekly trades too. My account is small and I can afford approx. 500 - 1000 risk per trade, so one or two spreads per week, collecting 30 - 60 weekly is very appealing to me.
YaKa Martzee
Can you give me a complete example of what you do?
maturity/strike/premium earned and max risk?
For example at 03/03/2015 when market was at 2110.60 I opened the following trade:

+ 1 SPX Mar1 2015 2085 put (March 6 expiration)
-1 SPX Mar1 2015 2080 put
@ 0.35 credit

two days later the market crashed. Then I was rolling that trade until today, when finally I was able to get rid of it with some small gain, but it was quite stressful. Looking for ways to avoid this.
YaKa Martzee
There is something I dont get.
1) you get long the put spread, how can you earn premium? You should pay something.
2) Can you confirm: the put spread max risk is 5, the premium 0.35. You could multiply premium by 13, correct? the maturity of your trade was just 3 days?

You probably inverted the signs. If i got that correctly:
Your strategy: spot ref 2110, you short 3d put spread 2085/2080 and you receive 0.35pt.
(1) 3d, 1pct away risk in a market that moves 1% per day... you will get hit often enough to lose in 1 time what you made over 10 trades...
(2) i guess for the 0.30 to be significant you have to leverage your trade massively and you lose on the first few trades, the strategy never take off.

I think: you need to totally change angle....

Options: you sell expensive options that you think may not happen or where you are happy to be exercised.... You buy cheap options. YOU DONT SELL CHEAP OPTIONS.
YaKa Martzee
The only thing i can tell you: NEVER SHORT A NAKED OPTION WITH CLOSE STRIKE...
Doing that one time is dangerous.
Doing that systematically, you will get fried. question of months.
EN English
EN English (UK)
EN English (IN)
DE Deutsch
FR Français
ES Español
IT Italiano
PL Polski
SV Svenska
TR Türkçe
RU Русский
PT Português
ID Bahasa Indonesia
MS Bahasa Melayu
TH ภาษาไทย
VI Tiếng Việt
JA 日本語
KO 한국어
ZH 简体中文
ZH 繁體中文
AR العربية
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing My Support Tickets Contact Support Ideas Published Followers Following Private Messages Chat Sign Out