SPX January 2 Put Credit Spread closed before the barrage of economic news.
I mentioned in my weekend update that although the target closing order was .15, that I would not hesitate to close for .20 if the opportunity presented itself. At approximately noon, with SPX trading at 1837, the position was closed for a debit of.20. This represented a gain of $55, or 5.9% of the actual margin/risk. While just shy of target gain, I felt it wasnâ€™t worth the overnight risk with all the economic news beginning tomorrow. In addition to the price increase, any increase in volatility preceding the release of the FOMC minutes Wednesday afternoon has the potential to hurt the position with only 2 days until expiration.
However, the short put strike of 1795 is over 40 points away, so â€œshouldâ€ be in a safe spot for those of you who choose to stay in the position until the debit to close reaches $.15.
The next trade entry will be not be until Friday of this week. The monthly Non Farms Payroll report is being released before the open that day; and that can quite often be a market-moving event. If this trend continues, the weekly trade for the January 3 cycle will most likely be another put credit spread. The next weekly cycle is the regular January monthly cycle.
Details on trade entry will be posted then.
Stay keen on your risk management and trade carefully,