When SPY Sells off 5% in Two Days

T

timetotrade

Greetings,
I am somewhat of an option newbie. The SPY has sold off about 5% in the last two days. That is a rare occurrence and seems to happen every few years. In the past, this type of sell-off will usually get a bounce in a day or two and then might sell-off again. What are some good options strategies to use over the next couple weeks looking for the bounce? And then what might be a good strategy to use after the SPY trades higher for a couple days and I expect it to go to new lows?

Thank you for any feedback.
 
Only a few people know the reason why but the big firms do not want you to know how it is manipulated and they have been good at shutting down any news sources that try to put the real info out there. I read somewhere the real reason for this sell off is because the Fe
 
timetotrade said:
Greetings,
I am somewhat of an option newbie. The SPY has sold off about 5% in the last two days. That is a rare occurrence and seems to happen every few years. In the past, this type of sell-off will usually get a bounce in a day or two and then might sell-off again. What are some good options strategies to use over the next couple weeks looking for the bounce? And then what might be a good strategy to use after the SPY trades higher for a couple days and I expect it to go to new lows?

Thank you for any feedback.
More...
Last time SPY down more than 5% in two days is Nov 1, 2011. Here is the complete list:
Find the worst down in 2 days?
19971027 -8.1631
19980827 -5.2511
19980828 -5.0519
19980831 -7.4699
19981001 -5.8414
20000414 -7.0276
20010312 -7.1114
20010403 -5.3989
20010918 -5.4521
20010920 -5.1321
20020710 -6.0671
20020719 -6.6454
20020722 -6.3781
20020723 -5.6192
20020805 -5.6432
20080929 -7.7904
20081006 -6.3746
20081007 -9.3438
20081008 -6.8850
20081009 -9.3272
20081010 -9.2401
20081015 -11.1791
20081016 -6.0891
20081022 -8.2684
20081027 -8.4415
20081106 -9.5110
20081112 -7.3518
20081117 -6.2521
20081120 -13.3555
20081201 -7.7105
20081202 -5.3502
20090130 -5.2180
20090217 -5.3072
20090302 -6.6385
20090303 -5.2212
20090330 -5.1979
20110808 -6.6522
20110819 -5.8745
20110922 -6.0830
20111003 -5.2736
20111101 -5.1322
20150821 -5.1133
 
Mike Okistini said:
Only a few people know the reason why but the big firms do not want you to know how it is manipulated and they have been good at shutting down any news sources that try to put the real info out there. I read somewhere the real reason for this sell off is because the Fe
More...
WOW they even shut down your post before you could tell us the reason. Hope your still alive :eek:

As for the original question the options strategy is the easy part (OTM puts and calls to be aggressive of for less risk look at spreads) the difficulty is getting the direction right. No reason history should repeat itself.
 
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Jakobsberg said:
WOW they even shut down your post before you could tell us the reason. Hope your still alive :eek:

As for the original question the options strategy is the easy part (OTM puts and calls to be aggressive of for less risk look at spreads) the difficulty is getting the direction right. No reason history should repeat itself.
More...

That's the joke. :-)
 
The worst two day in Dow index since 1960 was down 26.17% on the black Monday Oct 19, 1987 following a Friday down 4.6%. The major reasons were said programming trading, market psychology and overvaluation. That sounds similar now. Will be fun to see what is going to happen next Monday.
 
"when vol is high short vega long gamma.. " see samuel1 haha. when vol is low long vega short gamma... basically use the calendar! trade calendars! go deeper into the calendar .. that is my thoughts... I am not going to get into the discussions about rational or irrational markets or conspiracy theories.. If you have strategy it should include this plus much more downside.. but my guess is it's uncertainty surrounding borrowing costs and the ancillary effects of monetary policy abroad reverbing back home
 
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Anyone know what Deviation levels the SPY/SPX hit over these last few days during this huge drop / selloff ?

Just wondering for Selling Credit spreads, if selling at strikes that were 3 SD OTM would still have you " Safe" in your position

Thanks much
 
md2324 said:
Anyone know what Deviation levels the SPY/SPX hit over these last few days during this huge drop / selloff ?

Just wondering for Selling Credit spreads, if selling at strikes that were 3 SD OTM would still have you " Safe" in your position

Thanks much
More...
Your asking if you were selling otm credit spreads at 12 vix what would your risk look like right now..... Bad!!!! Chart a 190-185 credit spread for Sept expiration a see
 
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