Hope you all had a great weekend!
Some of you participated in the hypothetical February SPX straddle I discussed in Thursday night's column.
The market has bounced around the last few days and is hovering just below 1330 right now. The 1335 short straddle could be bought back below $35. So, moments ago, we bought it back at $34.70.
We originally took in $40.70. So, we locked in $6.00 x 2 contracts. That's a profit of $1,200 -- in just a day and a half.
Some may wish to wait longer and let time decay put more money in your pockets. Perfectly understandable. It looks like the SPX may hold at, or near, this level. The volatility may stabilize and more profits will appear as time goes on.
This is just another idea for those who prefer to do some short term trades in their portfolio to try and generate some extra profits while we wait for our Iron Condors and credit spreads to work their magic.
Take care and trade smart.