Weekly SPY options

[JSOP]

Thanks all....I am used to trading the SPX and naively assumed the index was cash settled after buying the spread,and was concerned with hedging the short option if exercised.

One less thing to worry about..With that said,I should probably know the timing of dividends as well..

SPY is not an index; it's an ETF based on the S&P 500. SPX is the index and that's cash-settled.

Good luck!

 

[JSOP]

His position will become a synthetic put if he is assigned on his short call. He bought the calendar, for a debit. It is not a credit spread.

I thought he sold the further faraway option 6/18 expiry and bought the more recent one the 6/15 expiry? Wouldn't that be credit, no? And by the time when the 6/18 assigns, if it assigns, he will be just short since the 6/15 call would've expired so he would just be short and no synthetics.

 

[FSU]

I thought he sold the further faraway option and bought the more recent one? Wouldn't that be credit, no?

They way I read it he bought the 6/18 calls and sold the 6/15 calls for .02.

 

[taowave]

Sorry for the confusion..I bought the calander for a .02 debit...

Bought the June 18 call,sold the June 15.

1.17 dividend on the 15th..Didn't initially catch the div

 

[IndyJonerJr]

Tao,

you said you use to trade SPX,

wondering why you went SPY, as you lose 1256 contract then

 

[taowave]

Hi Indy,

Good question..I traded SPX when I worked on a derivatives desk, bit have been trading and spreading the weeklys on SPY..

Not sure what you mean by lose 1256 contract..

 

[IndyJonerJr]

It always seemed better to me to go futures ( ES ) or index ( SPX )

Because the 1256 contract is on indexes or cash settled... you gain the tax advantage of 60% long term / 40% short term .. I think that works out to 30.6% taxes for highest tax bracket..

Highly more beneficial I would think???