I put this on because when we have volatility pivots like we did on Monday, they rarely are one off events. And after the S&P has retraced over 50% of the ugly bar from Monday, now is a good risk/reward setup to sell some call spreads.
Here’s the trade:
Sell to open HALF SIZE SPX Jul2 2120/2125 Call Spread for 1.00
ADD to the trade at 1.60
CLOSE at 0.30
BAIL on close above 2120
For the Interactive Brokers people out there…
This is an AGGRESSIVE trade because we have CATALYST RISK going into the weekend with the Greek referendum. But I believe that it’s a high odds trade to have the open from Monday hold as a key resistance level.
Update: July 6th, 2015
The gap down really helped the trade, and the spread is nearly worthless now.
Buy to close SPX Jul2 2120/2125 Bear Call Spread @0.10
Margin and P/L
Enter at 1.00, Exit at 0.10