SPY Position Update
SPY closed $129.52 on Tuesday â€“ the January position is approx. $3,000 in the red
SPY is priced ABOVE its current 14-day EMA (see SPY chart down below)
SPY is trading ABOVE its 20-day Bollinger Band SMA (see SPY chart)
SPY is ABOVE its 50-day simple moving average (see SPY chart)
SPY is also ABOVE its 200-day simple moving average (see SPY chart)
Relative Strength Indicator (RSI) is extremely bullish (See SPY chart)
Moving Average Convergence/Divergence (MACD) is neutral (See SPY chart)
The December 20th Couch Potato published a January expiration month call spread
This spread is approx. $3,000 in the red (see tables below)
$128 strike price short call delta is .7042 (30% probability this position will be profitable)
SPY Risk Analysis
Last week the SPY gapped above the $128 short call. January options expire at the close of business on Friday and as indicated above we are exiting this trade.
We are immediately closing out the call spread. As mentioned above, January options expire this Friday and we don't want to get assigned on any of the short call contracts and we definitely want to limit our loss.
Regular Couch Potato Readers are probably used to seeing a trade adjustment to close out losing trades and offset losses. This time we could not identify an adjustment that we could do in the January expiration month that would justify the risk. All traders have occasional losing trades and as we said in the January 15th publication, part of trading is knowing "when to hold em and when to fold em".
Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.