April 28, 2017

October has been kind to all of our options strategies

The overall market has not quite reached an oversold state and by the looks of it I am not so sure that it will. After the closing bell some of the closely watched tech giants came out with postive earnings reports which have led to a substantial push higher in futures. If this holds we could see the typical mid-week, options expiration, positive bias.

Going back two years, the S&P (SPY) has a bullish bias during the week of options expiration, particularly if you only include the trading days of Wednesday, Thursday and Friday. As I mentioned a few posts ago, 10 out the last 12 expiration have finished on the positive side of things. While the market has some catching up to do if it wishes to contniue the bullish trend, my guess is that the short-term lows have possibly been established this week.

Again, our Iron Condor strategy, barring a major advance/decline over the next two days will be profitbale again this expiration cycle with roughly a 8% gain over the last four weeks. Furthermore, our New SPY Diagonal Leaps Strategy continues to move higher as theta has officially taken over with a reading of $44. Time decay combined with the upside push over the last four weeks has allowed the strategy to reap a gain of $1241.50 or 6.2%. This is certainly a wonderful beginning to a long-term strategy.

Tomorrow we will roll our short positions into November so you should be sure not to miss how this is performed as it is an intergral part of the strategy.

Overbought/Oversold for October 16, 2007

S&P (SPY) – 35.9 (neutral)

Russell 2000 (IWM) – 35.1 (neutral)

Dow (DIA) – 36.9 (neutral)

Nasdaq 100 (QQQQ) – 51.3  (neutral)

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Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com