This morning's open put our SPX June 4 Weekly Call Credit Spread in a perfect position to exit for target.
This morning's gap down was to our advantage; our closing order filled shortly after the open to buy back the spread for .25. This position reached our target gain; the net gain was $101 after commissions, or 11.6% of actual margin.
This week brings quite a bit of economic news, including GDP Wednesday and Weekly Jobless Claims on Thursday. I will not enter a new position until after the news on Thursday. If market conditions are suitable, I will enter a credit spread for the July 1 cycle (Option Code 130705) which expires July 5.
If the 20 day Moving Average is below the underlying price, I will enter a Call Credit spread. If the Moving Average is above the underlying price, I will enter a Put Credit Spread.
For those of you who may not be familiar with the guidelines for this trade, they were published in an article dated May 12, 2013. The article can be found here: Link to Articles
The original guidelines call for a Monday or Tuesday entry, however, I have found that sufficient credit can usually be obtained up until Friday, 7 days prior to expiration. The minimum credit we will accept in order to enter the position is .75.
A trade update will be posted with entry details.