Leaderboard

Barring a large market drop the rest of today - Friday, I will be rolling to April. However, the trade will no longer be structured as a 4:5 ratio ATM and a 1:5 slightly OTM. Rather, it's simply going to be about a 3.5/5 ATM, thus becoming more defensive. The Apr 185's are currently trading right at $5.00 and will have 13 weeks before expiration. If you do this trade with 10 SPY contracts, it would look like: Buy 10 Apr 185 @ 5 Sell 7 Jan 31 185 @ 1.72 Cost of trade: $5,000.00 Need 0.55/week to break even. Goal: 2% per week in profit (or $100.00 per week for 13 weeks), which would take 0.69 / week. At current volatility levels, that's a VERY ambitious goal. However, if we were to only gain 1% per week, we would only need $0.62/week, which is much more manageable. Given the fact that I think volatility is going to go up some over the next couple of months, this is entirely possible. If there is a downswing, the trade is reasonably protected as well, given the 3 extra long puts.