Trading in Luxury

I want to check out put credit spreads with weekly options. Just picked out four to look at and follow for a week. Priced fri Nov, 29, expiring Dec, 3, each with $1000 margin.


BAC, $11.12, 10/11p, $120

F, $16.10, 15/16p, $190

SLV, $26.13, 25/26p, $290

LVS, $50.06, 49/50P, $420
 
I wanted to check out put credit spreads using the weeklys. To begin I just wanted to see what kind of credits could be hauled in, what kind of risks would be involved, and how they would progress thru the week.
I priced these near the EOD Fri Nov 26, and they are for Dec 3, expiry and $1000 margin each is required.

update for EOD Mon 29, stock price, spread value and "net"
BAC, $11.12, 10/11p, $120.......eod Mon 29, $11.31, $60, $60

F, $16.10, 15/16p, $190............eod Mon 29, $16.06, $180, $10

SLV, $26.13, 25/26p, $290.......eod Mon 29, $26.55, $160, $130

LVS, $50.06, 49/50P, $420......eod Mon 29, $50.49, $340, $80

when checking during the day, the F and the LVS trades did show a loss. (I know these are risky trades)
 
I wanted to check out put credit spreads using the weeklys. To begin I just wanted to see what kind of credits could be hauled in, what kind of risks would be involved, and how they would progress thru the week.
I priced these near the EOD Fri Nov 26, and they are for Dec 3, expiry and $1000 margin each is required.

update for EOD Tue 30, stock price, spread value and "net"
BAC, $11.12, 10/11p, $120.......eod Mon 29, $11.31, $40, $80 (corrected eod Mon)
.........................................eod Tue 30, $10.95, $190, ($70) ouch, the wikki-licker leaked on the BAC parade!

F, $16.10, 15/16p, $190............eod Mon 29, $16.06, $180, $10
..................................................eod Tue 30, $15.95, $220, ($30)

SLV, $26.13, 25/26p, $290.......eod Mon 29, $26.55, $160, $130
...................................................eodTue 30, $27.44, $40, $250

LVS, $50.06, 49/50P, $420......eod Mon 29, $50.49, $340, $80
.................................................eodTue30, $50.08, $380, $40
 
I wanted to check out put credit spreads using the weeklys. To begin I just wanted to see what kind of credits could be hauled in, what kind of risks would be involved, and how they would progress thru the week.
I priced these near the EOD Fri Nov 26, and they are for Dec 3, expiry and $1000 margin each is required.

update for EOD Wed Dec 1, stock price, spread value and "net"
BAC, $11.12, 10/11p, $120.......eod Mon 29, $11.31, $40, $80 (corrected eod Mon)
.........................................eod Tue 30, $10.95, $190, ($70) ouch, the wikki-licker leaked on the BAC parade!
.....................................eod Wed Dec 1, $11.29, $30, $90

F, $16.10, 15/16p, $190............eod Mon 29, $16.06, $180, $10
..................................................eod Tue 30, $15.95, $220, ($30)
.....................................eod Wed Dec 1, $16.46, $40, $150

SLV, $26.13, 25/26p, $290.......eod Mon 29, $26.55, $160, $130
...................................................eodTue 30, $27.44, $40, $250
....................................................eod Wed Dec 1, $27.81, $10, $280

LVS, $50.06, 49/50P, $420......eod Mon 29, $50.49, $340, $80
.................................................eodTue30, $50.08, $380, $40
..................................................eod Wed Dec 1, $51.34, $150, $270

ok, so if we would have closed these out today we would have collected $790 in 4 days using $4000 in margin.
 
In follow-up to the 4 weekly option credit spreads we were following (BAC, F, SLV, LVS), one point to take away is to close the spreads after some percentage of profit is hit and not to plan on riding them to $0 expiry.

I am thinking ball park might even be 50%. If they start to go in the profit direction dont worry about getting out too early and/or leaving something on the table. These are risky trades and if a profit shows up, take it and move on.

I think we also want to plan on being out by Wed, as we did yesterday, to clear the deck and free up margin for trades that could be considered on Thu for the next weekly option cycle.

Risk and how we handle the trades moving against us is still an unknown as the trades were all to the good when closed yesterday. What happens when they go bad and what kind of action we can take still needs to be proven. Although some of the trades moved into the red and then turned back around during the time they were on.

Today LVS got hit with the China item, did we even know it was a pending event? If the trade was still on it would be showing a $110 loss. We would need to either close out at the loss, or hold over to tomorrow, Fri, last option trading day, and see if it turns around.

I want to keep it simple.
 
looking at a SPY trade since we are in a favorable time of the year. but we have had a pretty good run lately and my spy-dicator is turning down so i will watch it and see if it continues down or turns around.

http://stockcharts.com/h-sc/ui?s=SPY:VXZ&p=D&yr=0&mn=6&dy=0&id=p41914154310

Trade idea
SPY
Date: 12/23/10
Price: 125.60
Almanac: End of Yr. favorable
Strategy: Bull Put Spread
T/A Support: 119???
Time forTrade: 4 wks
BTO: JAN 119 PUT @ .50/.51
STO: JAN 120 PUT @ .60/.62
Net Credit: .09
At Risk: 0.91 (1.00-.09)
Margin Gain: 10%
Probability:
% OTM: 4.5%
 
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