Hello, guys hope all is well. Today we will be looking at SPY and how I will play the market this week. Based on the expected move for this week of $6.79 we are possibly looking at a range between $410.01 - $423.59. On Monday I opened the Put side ($400 / $398 and collected $9 per contact) of my Iron Condor and leg into my Call side roughly Thursday afternoon or right before close.
Last week we saw a slight dip in the markets from Monday's open of $424.43 to Friday's close of $414.92. This 2.24% drop has made the VIX pop to the $20 levels from the mid to high teens. With this pop, we will be able to take advantage in one of two ways. 1) We can keep our stricks the same as we did last week because we still believe that there is a lot of supply at this price and we want to collect more premium. 2)We will be able to get lower on the put side/higher on the call side while still collecting the same amount of premium as we did last week.
I will be going with the second option because although there may be supply at these levels I still want to sell the .10 - .05 deltas with a $2 widespread.
I'll be looking to collect between $8-$10 per contract on the put side give me roughly a 4% gain while also looking for the same percent gain on the Call side later on in the week. Since no additional collateral is needed to add the Call side, we are looking at a minimal gain of 8% if we stay in our expected range.