NaughtyPines
Short

TRADE IDEA: SPY JUNE 24 207/210 LONG PUT VERTICAL (GTC ORDER)

FX:SPX500   S&P 500 index of US listed shares
Given the fact that /ES, SPY             , SPX500             continue to conform to the downward sloping yellow channel, I'm looking to continue to short on meaningful retraces of price, ideally to the upper bound of the yellow channel, since I think this offers the best risk-reward here. I can do this one of several ways, for example, by entering a GTC order to short /ES, SPY             , or SPX500             if price strikes that upper bound (currently around 2075). An alternative way to short via options is using a debit spread set up broken across that upper bound -- a SPY             207/210 or SPX             2070/2100 long put vertical.

Currently, that spread is priced at a 1.73 ($173) debit for the SPY             spread, but I don't want to pay that. As price moves toward the spread, it's price will decline. Given the fact it's a three-wide, I want to ideally only spend something like 1.00 ($100) on that spread, so I'll set up a GTC order for a 1.00 fill for this coming week and go from there.

Notes: As you can see from my posts, I'm largely a premium seller, so my go to strategies are generally credit spreads. With SPY's implied volatility being somewhat low here (it would go even lower on an upmove), premium selling isn't that great here, so I'm looking for a small position alternative over entering a comparatively buying power heavy short /ES position ... .
musician
6 months ago
Where is the sense in ITM strikes for a simple Put spread? I know Put spreads with OTM strikes. On expiration date the underlying shall have come down to near the strike of the short Put. Then you generate someearnings.

If you are below that strike from the start and you want to bet On falling Markets you need at least a 2-1 spread, 2 long puts versus 1short Put. Please correct me if iam wrong
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