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SPX at 4685
I’m going to set up a BEAR TRAP with 24DTE (days to expiration).
This is a combination of a 10 point wide put debit spread and a 50 point wide put credit spread.
We’re looking for a NET credit around 0.70c
This trade does not have risk on the upside and we’ll get to keep initial credit if the underlying (SPX) is above the long put of the put debit spread.
On the downside, we’ll make money at expiration all the way down to the short strike of the put credit spread.
The best case for this trade is SPX slowly moves inside the short put of the put debit spread and a short put of the put credit spread.
Risk Profile:
Entry Order Ticket:
SPX at 4680
This trade has 9 days left until expiration. Right now, we can collect another 0.75 credit to close this trade, which will result in a total profit around 1.40 – 1.50
The BPR for this trade was around 39.30
1.40 profit on 39.30 margin represents about 3.5% return in 15 days.
Closing Order:
Order Ticket Type Asset Duration Strike C/P Sell To Close SPX 31DEC 4225 PUT Buy To Close SPX 31DEC 4275 PUT Buy To Close SPX 31DEC 4520 PUT Sell To Close SPX 31DEC 4530 PUT Total Credit: 0.7
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