SPY Bear Call spread 11/3/2023
Updated
SPY 11/3/2023 11/3/2023 Call Expires 12/15/2023 Sold 452 Bought 454
Credit 0.43 Risk Ratio 3.65 Return on Risk 27.4% Opening DTE 42
I am modeling the SPY in higher timeframe Bullish rally off -2 sig last week. The Bearish range beginning in mid Sept tested a triple top at +1 sig.
While the shortest bear range seller did NOT return, it was end of the week on Fri and SPY left behind 2 clear real gaps earlier in the week. It was late in the afternoon the probabilities of the weekly candle closing at the high were really small. It did fall off a bit after 3pm just after I sold the spread, but we'll see what happens on Sun in the futures if the push down to backfill missed/skipped order flow in the gaps below from 430 to 420 attempt to get filled.
The Bearish bet here is Not that we reach a new lower low below 410, but that the 2nd term seller returns at +1 sig in the Blue band just enough to get through 12/15 expiration. Short strike is back at +3 sig and I think it's a good trade a ceiling holds here and pushes back down into 425 or so. At which point I'll look to sell 393 Puts if it happens.
I also plan on selling more Calls at the +4 sig strike if we test 443.
Credit 0.43 Risk Ratio 3.65 Return on Risk 27.4% Opening DTE 42
I am modeling the SPY in higher timeframe Bullish rally off -2 sig last week. The Bearish range beginning in mid Sept tested a triple top at +1 sig.
While the shortest bear range seller did NOT return, it was end of the week on Fri and SPY left behind 2 clear real gaps earlier in the week. It was late in the afternoon the probabilities of the weekly candle closing at the high were really small. It did fall off a bit after 3pm just after I sold the spread, but we'll see what happens on Sun in the futures if the push down to backfill missed/skipped order flow in the gaps below from 430 to 420 attempt to get filled.
The Bearish bet here is Not that we reach a new lower low below 410, but that the 2nd term seller returns at +1 sig in the Blue band just enough to get through 12/15 expiration. Short strike is back at +3 sig and I think it's a good trade a ceiling holds here and pushes back down into 425 or so. At which point I'll look to sell 393 Puts if it happens.
I also plan on selling more Calls at the +4 sig strike if we test 443.
Note
End of next trading day and I'm thinking it would've been better to be short at the 461 strike at the Bullish model +2 sig Blue line instead.I did think that the 27% was a bit high and something was off. But it was end of the week on a Fri and I thought for sure the following week would be a market breather that needs to capture order flow low before moving higher.
Today's price action says that thinking may be wrong.
I'll roll it out if I need to and the short strike gets near a challenge.
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