Option Investor


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TIME TO GTF (FUNDS) OUTI was hoping not to have to do this. But, the market looks strong here. And, with 7 trading sessions remaining until expiration, we should use discretion with a tablespoon of self-discipline and close our trades for this month. Things are too close for comfort.

At this writing, with the RUT trading at about 692.50, you should be able to close the bear call spread (710/720) for about $1.00. We took in a little more than that, so this trades turns out to be a wash. There is still about a 17+ cushion. Use your own discretion, but I don't want to have to be on pins and needles for the next week and a half -- plus be exposed to the Friday morning settlement opening price.

The same situation exists for the SPX 1285/1300 bear call spread. It's just too damn close. With the SPX trading at about 1271.50, you should be able to close the bear call spread for about $2.60-2.70. Again, there's still about a 14 point cushion, but we want to live to trade another day and the preservation of our capital is the most important thing at this point.

Good luck and trade smart!!


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