TheOptionPlayer.com sets up a S&P 500 Index ETF (NYSE: SPY) short-term (37-day) option trade (based on Wednesday’s closing quoted bid/ask prices)
Investors could simultaneously:
The difference between funds received and paid out is a $.22 per share credit which we keep if the S&P 500 Index ETF closes below $259 on Friday November 17th, but immediately execute a trade adjustment if it appears the price is moving higher. If the price gaps higher at the start of trading we might revise the strike prices. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
As confirmed in the chart below, similar to the other major equity indexes the S&P 500 Index ETF (NYSE: SPY) is trading at all-time highs. The S&P 500 Index is grossly overbought and has been confined in a tight trading range this week. The ETF is due for a pullback to resolve the excessively overbought condition and already momentum is starting to dissipate. Traders appear to have inputted promising quarterly results into stock prices and they will probably “sell the news” after earnings announcements start rolling in. It is reasonable to expect the SPY ETF to be below our short call on the November 17th option expiration date.
52-Week High: $255.05
52-Week Low: $208.38
Regular www.theoptionplayer.com subscribers can attest to the preponderance of successful trades published on this website.
The information presented here is for educational and informational purposes only, and this document is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful.