IWO Trading Floor

Become a Great Options Trader

[CLOSED] – Retracement Short in SPX

By

spx-daily

Market had a great pop on the greek news, but I think the momentum will slow down in the near term.

Here’s the trade:

Sell to open SPX Jul4 2130/2135 Bear Call Spread

Do this in 3 tiers:

1st tier: Enter at 1.00, Exit at .50

2nd tier: Enter at 1.50, Exit at 1.00

3rd Tier: Enter at 1.90, Exit at 1.50

This is a smart scaling approach if the momentum does continue.

If the SPX breaks 2135, then exit the trade for a loss

If you want to do something similar in SPY with lower size, use the 213/216 call spread.

Update: July 14th, 2015

Add at 1.50 on second tier, will exit this spread if the price trades back down to 1.00.

Update: July 15th, 2015

Out of second tier at 1.00, will re-add at 1.60.

Update, July 16th, 2015

Gap higher today, so re-adding the second tier at 2.00, will exit at 1.50.

Update: July 21st, 2015

Getting ALL OUT of the spreads at 1.40.

Margin and P/L

Tier 1:
Margin: $400
Enter 1.00, Exit 0.40
Loss: $-40

Tier 2:
Margin: $350
Enter 1.50, Exit 1.00
Profit: $50

Tier 2 Reenter:
Margin: $300
Enter 2.00, Exit 1.40
Profit: $60

Max Margin: $750
Profits: $70
RoR: 9.3%

Disclaimer

U.S. GOVERNMENT REQUIRED DISCLAIMER – COMMODITY FUTURES TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS WEBSITE IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN