*****UPDATE***** 5/3/12

Today, I closed out the SPX May4 1430 Calls @.05 debit to avoid any short exposure going into NFP Friday. The trade had reached 91% of its full profit potential, therefore a prudent decision to take the profits and run.

I did however leave the long SPX May4 1435 calls open, but we all know they have a very high chance of expiring worthless.

SO HOW MUCH WAS THE PROFIT?

Original credit for the trade was .55 or 55$ per spread.

I had 4 spreads open with 2000 collateral put up for the trade, the collateral required was because I was sold short in the 1430-1435 spread of 500$ risk per spread. I had 4 spreads so that was 2000$ at risk.

So therefore received 55$ per spread x4 spreads =220$ max profit available =1780 at risk. I say 1780 at risk because if the spread went against you and was at full loss the 220 credit is still yours to keep.

So the profit was .50 per spread since I bot the short leg back at .05=20$ off the profit potential.

2000 original collateral which included the original credit received to make the full 2000/200= 10% profit

05/03/12 Bought to Close 4 SPX Call

Spx May 04 2012 1430.00 Call
SPX May 04 2012 1430.00 Call $0.05

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*****UPDATE***** 5/2/12

I HAVE CONTINUED TO LEAVE THE TRADE OPEN ON 5/2 GOING INTO 5/3. IT IS PERFORMING WELL & I CANCELLED THE .15 BUY TO CLOSE BECAUSE IT WAS ORIGINALLY A SCALP NOW MORPHED INTO A SWING TRADE COMFORTABLE TO HOLD.

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Slightly before the highs of the day 5/1  I opened (4) May4  SPX 1430/1435 bear call creditspreads @.55credit. This decision was made using information from a trusted source saying that a reversal later in the day was a high probability. Well it arrived, the spread as of close 5/1 is now .17 mid price to buy back. His Twitter handle is @nicetrade, but his private subscription stream is @mktforecasts, his subscription is well worth the money, and has both saved and earned me thousands of dollars. Before the close 5/1 I placed a GTC order to buy back the spread @.15, I got very close to executing that scalp, we’ll see how it goes 5/2.

This should actually be a post in trade ideas, but if we get a very nice decline 5/3, will turn right around and sell  SPX May4 1360-1365 or 1370-1365 bull put spreads at a nice premium of .30-60 if conditions look right and create an Iron Condor. The Iron Condor would be created with equal number of contracts, spread difference of 5, and expiration dates. Will notify on twitter stream if enter the new trade.

05/01/12 Bought to Open 4 SPXW Call

Spxw May 04 2012 1435.00 Call
SPXW May 04 2012 1435.00 Call $0.75
05/01/12 Sold to Open -4 SPXW Call

Spxw May 04 2012 1430.00 Call
SPXW May 04 2012 1430.00 Call $1.30
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