Bought 8 Mar16 155 puts @ 3.51 will hedge later.


*Update* 7:19 Pm EST

Here are the trade details:

02/28/13 Bought to Open 8 SPY Mar 16 2013 155.00 Put $3.51 -$2,818.45

Why did I buy outright $SPY puts and not a spread today? Quite simply put, I feel more downside to come very soon and wanted to scalp as much as possible, and or create a spread later.

Creating a spread later by selling lower puts at lower Spy prices would pretty much make it a free play if wished to sell lower spreads @ 3.51 credit.

For example, if SPY moves to 150 soon, I could sell 153 Puts against around 3.51 or higher, and make the spread of 155-153 of $2 mine to keep later on, if and only if SPY stays below 153 by Mar16 expiry.  A sale of lower SPY puts at higher than 3.51 would be guaranteed money in the bank, on top of getting all of my initial 3.51 debit back as well.


I already had a very small starter position in SPY Mar16 155 Puts bought on 2/5/13

Trade Details:

02/05/13 Bought to Open 2 SPY Mar 16 2013 155.00 Put $5.21 -$1,048.33

Total position now is 10 SPY Mar16 155 Puts at an average price (including commissions and fees) of $3.87 now per contract, or $3.86678 to be exact.

I have been wanting to average down for a while now, and figured today was the perfect opportunity.