Here's the current chart of the SPX:
The study on the bottom is a 5 day rolling returns study. It shows that the S&P is down jsut under 3% over a 5 day period, and that is oversold over the short term.
Is it possible that the SPX continues to selloff from here? Sure. But is is probable? No. This sets us up for another spread sale trade.
Here's the spread I'm going to be trading:
Aug1 2020/2015 Bull Put Spread
These options expire in 11 days. So not this week's options, but next week's options.
Just like the other SPX spread sales I've done, I will be scaling in and out aggressively.
Here's how I'll trade it:
Sell to open @0.90, close at 0.40
Add to trade @1.30, close at 0.90
Add to trade @2.00, close at 1.50
So if I get filled on an add and can close that add for a profit, I will then look to reenter.
Update: Jul 28th, 2015
Bidding to close first round at .30
Will Re-open at 1.00
Margin and P/L
Per Spread: Credit 0.90, Risk 410
Returns: 0.60 per spread, 14% RoR