Weekly Put Options Trade: SPX

SPX Weekly Put Options Trade

Here’s a trade if you are brave enough:

S&P500 is down about 2.5% today. Sitting at 1145.

I am taking a stab at some weekly Puts.

Sell to Open SEP2 11 1070 Puts, Buy to Open SEP2 11 1065 Puts for a credit of .35 each

That equals roughly a 7.5% profit potential. These will stop trading Thursday at the close. The settlement price will be released Friday morning. Same as with regular SPX options.

As long as the SPX stays above 1070, this trade makes money. It has a 90% chance of doing so.

Will SPX drop 80 points in a couple days? Seems unlikely but who knows. Still, I like my chances.

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1 Comment

  1. Mike on September 9, 2011 at 5:37 pm

    I duplicated your trade in TOS Paper Money except that I put the trade on the day after you did so I sold 20 contracts of the 1140 puts and bought 20 contracts of the 1135 puts. Though the market was down both Thursday and Friday, the SPX ended up at 1154 and the 3 day trade was profitable showing $550 profit in the Monitor tab and $700 in the Analyze tab of the TOS platform; I’m not sure which value is correct or why they are different but the trade was a success and I learned from it. Thanks bud! – signed, Copycat

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