SPX Weekly Trade Entry planned for December Cycle
As of this writing, futures are trading down a bit; the fear of tapering has certainly stalled the rally for the time being. The economic news being released at 8:30 this morning (Jobless claims and Retail sales report) could bring back the bulls. However, the 20-Day EMA is 1796.13 and SPX closed at 1782.22. The plan for this week's credit spread trade entry will most likely be a call credit spread. The option code for this cycle is 131221; it is the regular monthly cycle that expires on December 21.
We will sell a short call with a delta of approximately -.15 or less, as long as the minimum credit of $.75 is available. As of the close, the 1820 call has a delta of .13 and is showing a credit of $.80, but that will most likely change when the market opens. I will be very cautious with the trade entry and sell as far away from the underlying as possible. After the move yesterday to the downside, it is very likely the market could fill in the gap, or a portion of it.
I will post entry details later with specific strikes and credit received.
As always, stay keen on your risk management and trade carefully.