FX:SPX500   S&P 500 Index
819 8 17
Spot ref: 2070 (tomorrow/Monday)

Time horizon: 20 March 2015:
- SP500             can’t go higher than 2140
- 2080 is likely to retain.
- SP500             could break decisively below 1980

Great option strategy that fits the market set up:
Expiry 20Mar15
Buy Put 2000 Premium 23
Sell Put 1930 Premium 13
Sell Call 2140 Premium 6
Net premium 4

Best case: Maximum gain 70, could multiply premium by 12.
Worst case: Spot dies on liability strike, I d love to short 100% 2140 which would be the case here if exercised.

Premium invested 25bp.
that was a HUGE claim my friend, cant go higher than 2140 :-)
YaKa jangseohee
You mis read. it should read: can't go higher than 2140 before the 20march 2015... I am betting big this is not happening.
+3 Reply
Great work Yacine, thank you for sharing. Would you elaborate a bit why it "can't go higher than 2140 before Mar 20", one key assessment in your strategy? I understand it's a strong resistance with Fib clusters however market can do anything it wants, and with current volatility it'd easily move 100+ points in a few days (& 200+ by March) either direction, why no room to go up? I'm sure at least the centre bankers, Janet Yellen & Mario Draghi alike would fully agree with me, haha
YaKa ni.jin.90
Simple: the log speed line taking the tops of 2010, 2011, 2014 is climbing at a compounded rate of 12% per year (will be at 10,000 in 2028..).

I heavily bet it will remain unbroken overall, is at 2140 in Mar15 and climbs 1% per month.

Thanks Voila for the response... now it makes more sense to me. I also like the detailed scenarios you outlined, here is another likely path I see in near term (not calling the top, new ATH should follow after the summer correction):
YaKa ni.jin.90
I must say this scenario is the most reasonnable bulllish one... But i dont think so...
Anyway, dice are thrown, i bought the put spread 2000/1930 march.... Inchallah
thanks... I shorted as well, the pullback will be the tell, my scenario is invalidated if breaking down 1925 (wave 2 should stay above).
Again, speed line is amazing. I like the option strategy as well.
+1 Reply
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