Another IIC, betting that SPY will end up 1% away from where it ended today.
388P/390P/394C/396C for $1.29.
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Played this badly. Position was up to $1.80 but wasn’t in front of comp and sell order was at $1.90… Just sold for $0.70 (-45%) as totally running out of runway here.
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Got the following 10-wide spreads, betting SPX will be more than +/- 2% away from where we are now, in one direction or the other:
- 5/19 4190C/4200C bull spread for $2.50
- 5/19 4000P/4010P bear spread for $2.10
Highly unlikely we’ll stay suspended in the middle of that cone, 2-ish weeks from opex, right? 
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This play came back from the dead. Sold the call spread for $6, put spread will expire worthless. Net on trade is 30%.
This trade had died a slow death ever since I opened it 2 weeks ago. Can see the decay below for both spreads (ignore the put artifact). After the nice runup yesterday, I set the sell order for the call spread at $6 pre-market, as OptionStrat was telling me this price would hit if SPX touched 4200. Looks like it hit that right around 3.50pm.
Will set up similar again next month for opex, which is even bigger than the May one.
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Took a bunch of trades today:
- 6/30 (42DTE) 4005P/4000P SPX for $0.65 - because expecting market to go down into, and past June opex.
- 9/20 (124DTE) 20C/23C VIX for $1.11 - as with the other VIX positions, expecting turbulence at some point. Was trying to get for cheaper but didn’t want to miss any weekend fun, so half of what I would normally get.
- 5/26 4295C/4300C SPX for $0.35 - in case I am wrong and market continues to melt up. Very, very low probability of this happening, so very small position, but the returns will make up for it if. Actually meant to put order for $0.25 but fat fingered …
- 5/26 49P/48P/47P SCHW put butterfly for $0.05 - just for kicks. Lots of options were played on this, ton of it will expire, and so it should move somewhere. Expecting lower. Commission will be large, but throwaway position and will ignore unless it moves enough…
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These two expired worthless. RIP lotto positions.
These two positions filled today on standing buy orders:
- 6/30 (32DTE) 4005P/4000P SPX bearish put spread for $0.50 - adding to the position above. 4200 continues to be solid resistance…
- 9/20 (113DTE) 20C/23C VIX bullish call spread for $0.94 - used the lower vol today to add to the position that is waiting for things to go bump
Added this because there’ll supposedly be an announcement today of a $10B-$100B deal between “Saudi Arabia” and Muln… from the mouth of the person who claims a perpetual energy machine (lol):
- 6/2 (4DTE) 1P MULN for $0.20
Sell order hit earlier today for $0.30 (+50%).
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This GLD butterfly got filled for $0.05 earlier in the day. Low cost, but nice returns if people rotate out of gold into bonds as yields keep going up. I like that it will have to go through a major zone of green before it can turn red in a bad way. Lotto size.
Also based on this technical analysis. Lines are from beginning of the week since I was watching this. It fell below the lower trendline but made its way back up again. There are two gap fill zones below it could punch through in a hurry, under the right circumstances. The green zone of the butterfly above is between the lower gap and what could be support around $168.
Btw one could also just get a put spread for $2 more. Especially if commissions are high.
Picked up this 6/21 4255/4250 SPX put spread for $1.10, anticipating a post-opex drop of > 1.5%.
^^ Topped up on even more of these for $0.65.
Why do you expect the post-opex drop? I’m just curious. I’m trying to get better at playing opex week and after. So far, I’ve been pretty bad at predicting the movement
Fair question! It’s primarily because there are a TON of calls that are ITM right now, thanks to the recent run. MMs are hedged long accordingly. On the other side of opex, once these options expire, there is no need to hedge anymore, so they will liquidate these long positions. The selling should put downward pressure. It’s similar to what happened in May too, but the effect lasted 3 days only.
By the way, the argument is inverted for the pre-opex period, where all that results in a bullish impulse, as detailed here at the beginning of the month: SPX Tech Anal: Will "Sell in May and go away" come true again, or should bears give it a rest? - #11 by The_Ni
Vol is low these days though, so the amount of hedging is not as much as it used to be, and so the impact of MMs is also not as pronounced.
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Generally spreaking, have found these opex dates to be good potential pivot points. It doesn’t work to the dot beacuse everyone is front running it, but the flows are still so large that they do tend to end up moving the market somewhat.
Thanks!
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Got the following:
- 6/23 (8DTE) 4360P/4350P SPX bearish put spreads for $1.25 - on expectation that post-opex dehedging adjustment will bring us down about 1% sometime mid-next week.
- 6/30 (15DTE) 4335P/4325P SPX beariish put spreads for $1.25 - on possibility that the adjustment converts into a correction and ends the month where the JPM collar strike is, which is at 4320.
Relatively small positions, because:
- This is going against a strong trend.
- Similar previous plays listed above have not worked out so far, and will likely expire worthless in 2 weeks.
- This is primarily based on the option-based positional analysis, and secondarily based on the fact that markets are overextended by most metrics.
Possibly an error not to embrace the bull run, but I just can’t yet, with a chart that looks like this:
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Closed these out for $3.35 (+168%). Post opex de-hedging effect should be done by today.
Closed these for $3.10 (+148%).
SPX gapped down again at open. Closer we get to the 4320 JPM collar strike, the more it works like a magnet. If SPX closes higher than it opened, will likely get puts at the end of day again.
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This got filled around 3pm today:
- 6/30 4420C/4425C SPX bullish call spreads for $0.50
Reasons for being bullish into next week:
- We are close to the JPM collar strike of 4320 (closed at 4348). That should act as strong support next week, and so we could skim off its surface and higher, after a Mon test.
- End of quarter flows. Granted, most funds have been at it for a bit and not all of them are necessarily long, but still, we can expect some support from those rebalances this last week of the month and quarter.
- VIX seems quite nonchalant through this 2% drop this week. Reading that as normal pullback from overextended levels, on top of de-hedging flows, and not market starting to get nervous.
Reasons this may not work out:
- The 4320 strike could end up being strong magnet and smother movement next week.
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Closed this out for $1.00 (+100%). Not sure why market is running today, but good enough returns to close this out.
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And … topped up on even more of these for $0.50.
The world better not have absolute peace for the next three months. As it is, getting closer to expiration and even rolling is gonna get expensive.
Current wt. avg. price is $0.79.
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