The December 16th Couch Potato mentioned "...trading volatility started accelerating this past week. Don't be surprised if volatility remains high as this coming Friday is the last quadruple-witching day of the year when contracts for stock options, stock futures, stock index options, and stock index futures all expire..."
Right on queue, as confirmed in the SPY chart below, stocks are coughing up tripe-digit daily price moves. Today the S&P 500 index gave back most of yesterday's big upward price move and so far this evening overnight futures are signaling further downward momentum. If downward pressure sustains during after-hours trading and stocks open down tomorrow, this should be a good opportunity to exit our December SPY call spread. The risk and uncertainty of holding the SPY call spread into Friday's expiration is not worth it if we can close out the trade at a reasonable profit tomorrow morning.
SPY Position Update -------------------------------------------------------------
SPY closed at $144.29 on Wednesday â€“ the December position is approx. $500 in the black
The November 29th Couch Potato published a December expiration SPY bear call spread
Unless the S&P 500 index gaps higher tomorrow we plan on closing out this spread for an approx. $500 gain as soon as the trade is available. Just buy back the $150 short call contracts to close the position if you have difficulty selling the long $145 calls as part of a spread trade (see tables below)
As discussed above, tomorrow we plan on exiting our December SPY call spread as it is probably not worth the risk to maintain this position into quadruple expiration day on Friday.
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.