*Over the short-term Gold (GLD) has pushed into ‘very overbought’ extreme which could trigger a trade over the next few trading days. If gold happens to move higher and thereby push further into ‘overbought’ territory I will most likely enter a trade over the next few days. As always, subscribers, be on the lookout for a real-time trade alert and tweet of the trade.
New Credit Spread Options Strategy – Beta
The market moved lower again today and the Russell 2000 (IWM) is now 4.3 percent below the 86 strike. I sold a vertical spread with 53 days left until August expiration for a $.34 credit and now the spread is worth approximately $.45. The two week rally that occurred during the latter part of June/beginning of July sent the price of my spread higher, but the recent decline has pushed the spread back to close to break-even.
Once July expiration passes theta (time-decay) will accelerate. If the underlying ETF trades around this area or moves lower I should be able to get out of the spread for a nice gain in the next few weeks. Stay tuned!
In the meantime, I am looking at initiating a spread on the VIX and possibly a spread on Gold. I will be discussing the potential trades in my upcoming weekend report.
*I will be offering my new Credit Spread Strategy after August Expiration so if you are interested please email me and I will save you a spot. I will be limiting the amount of subscribers. The cost of the new service will be the same as my High-Probability, Mean-Reversion strategy – $99 per month. Please do not hesitate to email me with any questions that you have.
Again, I like my new strategy because now both of my options strategies are working in unison. I am able to collect premium in the Credit Spread strategy while patiently allowing time decay to works its magic. And, while I allow the time decay to eat away at my credit spread I am able to play short-term extremes in the ETFs I follow in the High-Probability, Mean-Reversion strategy. Intermediate and short-term options strategies at work.
Just like diversifying a portfolio of stocks, you should do the same when investing with options – diversify your options strategies.
Here it is: the first trade in my new Credit Spread Options Strategy, officially named Crowder’s Credit Spreads. I will continue to go over the trade in full detail in the Free Weekly Options Report.
Market Mumbo Jumbo
SPY remains range-bound!
Nothing New Here: Not much has changed over the past few weeks – range-bound trading persists. I appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread! I will discuss this further in Weekly Options Report.
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Options Strategy Indicator – Overbought / Oversold Extremes