SPY -- LOOK TO SELL SHORT CALL VERTICALS ON POST-PREZ DAY OPEN
With the upmove experienced in the broader markets on Friday, coupled with S&P futures moving 30 handles higher in low volume, U.S. market holiday conditions, look to sell on strength on Tuesday NY open via SPY, QQQ, IWM, and/or DIA short call credit spreads.
I have a wide variety of index ETF setups on at various expirations, but my primary focus will be on adding call side units in QQQ and SPY, where I put on March 18th short put credit spreads on the weakness experienced on the 11th and 12th.
With the short put sides, I've been legging into 3 or 4 strike-wide spreads with the short put at the 84% probability out-of-the-money strike; on the call side, I've been legging into similar width spreads with the short call at the edge of the expected move for the expiration, which is generally around the 75% probability out-of-the-money strike (due to vol skew on the call side).
Of course, I don't know exactly what the 75% prob OTM short call will be at NY open or how much additional movement S&P and/or Nasdaq futures will occur overnight. As of right now, it's looking like a comparatively calm Asian session: /ES is up 6 points, but oil appears to be somewhat frisky to the upside, catching a speculative bid on various OPEC/oil producing nation talk rumors, and gold is giving back some of its gains with a retreat back below 1200.
I have a wide variety of index ETF setups on at various expirations, but my primary focus will be on adding call side units in QQQ and SPY, where I put on March 18th short put credit spreads on the weakness experienced on the 11th and 12th.
With the short put sides, I've been legging into 3 or 4 strike-wide spreads with the short put at the 84% probability out-of-the-money strike; on the call side, I've been legging into similar width spreads with the short call at the edge of the expected move for the expiration, which is generally around the 75% probability out-of-the-money strike (due to vol skew on the call side).
Of course, I don't know exactly what the 75% prob OTM short call will be at NY open or how much additional movement S&P and/or Nasdaq futures will occur overnight. As of right now, it's looking like a comparatively calm Asian session: /ES is up 6 points, but oil appears to be somewhat frisky to the upside, catching a speculative bid on various OPEC/oil producing nation talk rumors, and gold is giving back some of its gains with a retreat back below 1200.
Comment:
Filled SPY March 18th 198/201 short call vertical/credit spread for a .54 credit and a QQQ March 18th 106/109 for a .41 credit.
