Quick Take: The SPY Bullish Power Play Trade
Time Frame: Three Days.
Underlying Index – SPY: Bullish Market Edge Opinion – No Stock Position.
Desired Price Direction: Up.
Option Position: Long Deferred ATM -1or -2 Call – Short Expiring ATM +1 or +2 Call.
Maximum Risk: Initial debit spread amount.
Summary: The index (SPY) performs as anticipated. The premium (air) is the short expiring call goes to zero while the long deferred call gains additional premium.
What Can Happen At Expiration And What Action Should I Take?
- If Stock Closes At Or Below The Short Call Strike Price. Close The Spread (Possible Loss)
- If Stock Closes Above The Short Call Strike Price. Close The Spread (Profit)
Quick Take: The SPY Bearish Power Play Trade
Time Frame: Three Days.
Underlying Index – (SPY): Bearish Market Edge Opinion – No Stock Position.
Desired Price Direction: Down.
Option Position: Long Deferred ATM +1 or +2 Put – Short Expiring ATM -1 or -2 Put.
Maximum Risk: Initial debit spread amount.
Summary: The index (SPY) performs as anticipated. The premium (air) in the short expiring put goes to zero while the long deferred put gains additional premium.
What Can Happen At Expiration And What Action Should I Take?
- If Stock Closes At Or Above The Short Put Strike Price. Close The Spread (Possible Loss)
- If Stock Closes Below The Short Put Strike Price. Close The Spread (Profit)
This Week’s Spy Power Play Trades
SPY Power Plays, if any are posted on Monday and Wednesday around 11:00 AM EST
| Market Edge ‘Market Posture’ | Bearish | ||||||||||
| Bullish – SPY Horizontal Trade | Risk Capital | $3,500 | |||||||||
| Market | Open | Short | Long | Open | 100% | % | Black-Scholes | Spread Difference | |||
| Open | Edge | SPY | 07/14/21 | 07/16/21 | Debit | Spread | Max | Risk Capital | Call Spread | Actual vs. | |
| Symbol | Date | Opinion | Price | Exp. Call | Def. Call | Spread | Target | Risk | Max Risk | Fair Mkt. Value | Black-Scholes |
| NONE | 07/14/21 | Bullish | $0.00 | 0.0 | 0.0 | $0.00 | |||||
| Bearish – SPY Horizontal Trade | |||||||||||
| Market | Open | Short | Long | Open | 100% | % | Black-Scholes | Spread Difference | |||
| Open | Edge | SPY | 07/14/21 | 07/16/21 | Debit | Spread | Max | Risk Capital | Put Spread | Actual vs. | |
| Symbol | Date | Opinion | Price | Exp. Put | Def. Put | Spread | Target | Risk | Max Risk | Fair Mkt. Value | Black-Scholes |
| SPY | 07/14/21 | Bearish | $436.73 | 434.0 | 439.0 | $2.30 | $4.60 | $2.30 | 6.6% | $2.54 | -$0.24 |
Results for this week’s trades will be posted over the weekend on the Scoreboard.
The information contained herein has been carefully compiled from sources believed to be reliable, but its accuracy is not guaranteed. Past performance is not necessarily indicative of future results. Traders should read The Option Disclosure Statement before trading options. No representation is made that any account is likely to achieve profits or losses similar to those shown. Due to the possibility of human and/or mechanical error by The Optionomics Group LLC, Inc., its sources or others does not guarantee the accuracy, completion or availability of any information contained herein and is not responsible for any errors or omissions or for results obtained from the use of such information.