I will update on Monday 12/30.
Reading a chart from Unwind, he suggested to find a inverse SPY . Credit to him for the suggestion.
I came across SPXS which is "3x inverse exposure to SP500 index" https://www.etf.com/SPXS
This idea is meant for bias on SPY , considering we are at ATH's and capital gains starts in January.
If you have same opinion of market conditions, let me know what you think or if you have an alternate idea.
Price above $13.94 confirms cross.
10WeekMA around $14.60 – re-analyze continuation or exit below trade for profit.
- Jan. 17 expiry. 12/17 Put Credit Spread. Take in $3.90 Credit (as low as $3.80). Max loss at $3.80 is $120. Max loss at $3.90 credit is $110. Max gain possible is $390.
Exit at 50% profit or your risk tolerance. Must exit before expiry.
One leg of this spread is 92% POP. Other leg is only 5%. Total is over 85% POP.
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I am not a financial advisor. My comments and reviews are based on what I do with my personal accounts.
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In a similar way, look at UVXY after a VIX spike, it always decays rapidly and buying puts on the 1.5x VIX ETF after a VIX spike is almost always a winner!
See Hungry_Hippo's post on why we don't hold UVXY lol- a real eyeopener!!!
This is WHERE selling options comes into play. When you have a credit spread - you get PAID for theta.
Time goes - we get paid. This is why I like credit spreads.
Clock never stops and theta works in my favor with credit spread. :)
I trade debit spreads- buy a long term put, short far OTM near-term. Risk is limited to the purchase cost.
In a credit spread risk is theoretically the price of spread, but in practice is greater, because of slippage and illiquid pricing in the OTM long contracts.
I buy the lower put to limit risk. I sell the higher put knowing it will lose value as the stock goes up.
I take a premium and give back less money (buy back the spread less than I sold it for).
Just like an insurance company.
Yes - car could crash and I would have to pay out like insurance. But chances are low.
Risk is limited to the Credit (which isn't my money) and my risk (my money).
I have been using VIXY which is about the same as UVXY.
But sometimes the options greeks work slightly different.
Maybe I will look into a UVXY credit spread along side a VIXY credit spread for a head to head comparison.
Thank you for stimulating my thought process :)
The SPXS credit spread above closing at 50% profit -returns approx $195 for $110 of risk.
THese ""ETFs"" contain ONLY futures contracts, no real equity, no real property, pure speculative bets. As the clock runs the contracts in them run down like options.
Adjusted for splits, UVXY trading at $13 is down from $31,880,000 PER SHARE, after only seven years!!! All those worthless contracts expired...
Any options strategy I enter or recommend is meant for weekly income.
Only if I buy a put or call farther out do I hold.
But last few times fundamentals are ignored when I buy single put/call, so only short entries for now.
Only shares I hold currently are SPXS for a week. GBTC in my ROTH IRA. Everything else is options.
I also think some of the previously high share price was due to splits/some other sort of share manipulation.
There is no stock which starts at $32Mil a share
You do NOT want to hold this more than a week, or two at the very most. Decay is real; if VIX sudden spikes this will make real money but if not it definitely dwindles, I saw this in my own account after just 3 weeks: