I’m expecting a quiet week or so as we head into the Thanksgiving holidays, and the S&P has seen (yet another) gap higher that needs to see some digestion come through.
I like dec/jan calendars because the premiums in december will start to fall hard as we head into holiday trading — fewer investors will be buying risk in december and will just simply go further out to jan.
Here’s the trade:
Buy to Open SPY Dec/Jan 207 put calendar for 1.27
IF the SPY sells off to 203 or rallies to 210 I will add to the trade.
You can use SPX if you want but liquidity is a lot better in SPY.
Target is 20% profit, I want to be in this trade no longer than 3 weeks.