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SPYDER  
About The Strategy
Buying puts is tough for a lot of people as you are going against how we are taught about investing. We are all fed the story of stocks moving higher. Why then buy puts? Simply because the market trend at times is down and not up.

 

 

 
Terms
Of Use
 
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not access or use this site.
Nothing presented is financial advice, trading advice or recommendations. Everything presented is the author's ideas only. The author accepts no liability for its use including errors and omissions. You alone are solely responsible for your own investing and trading. There are considerable risks involved in implementing any investment strategies and losses can be large. Trade at your own risk.

 
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ETF HEDGE

SPDR S&P 500 SYMBOL - SPY - 2011 ETF Hedge Trades
ONGOING EVALUATION & TRADE
There are many SPDR ETFs. They cover just about every aspect of investing. I use the SPDR S&P 500 ETF to hedge my stock positions against market downturns. I have used the SPDR S&P 500 (stock symbol - SPY) since 1994. While I do not believe anyone can truly guess short term market direction, I have found the spdr puts for the S&P 500 ETF to be a very effective means to hedge my put positions against market gyrations. I very rarely buy spdr calls as I have found I am not good on timing when to buy calls and sell them. However buying puts and knowing when to sell them in stock market downturns, I find much easier. SPDR ETFs options in general have good premiums, but when the stock market turns down, SPY put premiums are excellent which makes their trading a viable strategy.

Below in the SPDR INDEX I have written 3 articles that discuss the methods I use for my ETF HEDGE spy trades. They explain the spy options chain, spy trading, spy option prices, spy options expiration and my method for trading either when I am in front of the computer during the day and as such can make spy trades throughout the day, and the method I use when I am away from the computer and cannot follow the stock market during the day. One final article shows how I trade put options using the oscillator. This is my favorite method for trading the SPY S&P 500 SPDR ETF.

SPDR S&P 500 ETF STRATEGIES EXPLAINED:
A) THE SHORT VERSION: 4 Steps using the oscillator
B)
STRATEGY 1: When I can watch the market throughout the day
C)
STRATEGY 2: When I am unable to watch the market during the day


VIEW SPDR ETF TRADES BY YEARS:

SPDR-2011
SPDR-2010

ALL
PORTFOLIOS
INDEX
U.S. STOCKS
RETIREMENT PORTFOLIO
CANADIAN STOCKS

 
CURRENT U.S.
STOCK PORTFOLIO
INDEX

AT+T
CLOROX
COCA COLA
INTEL CORPORATION
JOHNSON & JOHNSON
KRAFT FOODS
MCDONALDS
MERCK & COMPANY
MICROSOFT
NUCOR CORPORATION
PEPSICO
SPYDER ETF
VISA
EXXON MOBIL
YUM! BRANDS

 
Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use

 

 

YEAR 1: 2010 - Trade Commenced Jan 2010

Strategy: HEDGE FOR DOWNTURNS IN OVERALL MARKET

 
Capital In Use At End Of 2010 12,000.00
Income Earned in 2010 $65,409.00
   

 

 

YEAR 2: 2011
Goal for 2011: 12%
Strategy: Buying Puts To Hedge against Market downturn
 
Capital Currently In Use 0.00
Income Earned in 2011 $75631.00

YEAR - 2011
THERE IS NO GOAL WITH THIS TRADE. IT IS AN ETF HEDGE AGAINST STOCK MARKET DOWNTURNS ONLY

STRATEGY USED - BUY SPDR S&P 500 PUTS FOR VERY SHORT TERM, SOMETIMES JUST THE DAY
* ACTIVE TRADES ARE HIGHLIGHTED IN YELLOW

SPY
Price at
time of
trade
Value
Jan 28 11 130.10 Bought 20 FEB 130 spy puts for $2.66
COMMENTS: Often when a stock market makes a new high, the next day there will be selling. Yesterday the stock market made a new high and today the stock market first started up and moved higher and then started selling. I put my order in to buy as the stock market started pulling back. This will only be a day trade.
32.00 (5352.00)    
Jan 28 11 128.15 Sold 20 FEB 130 spy puts for $3.45
Comments: Out for the day, but I was too early as the stock market moved lower and ended up closing near the low at 127.72.
32.00 6868.00 1516.00 1516.00
Feb 9 11 132.00 Yesterday another new high and today the stock market open down and started to sell off.
Bought 20 19MAR11 $132.00 spy puts @ 2.95
32.00 (5932.00)    
Feb 9 11 132.10 Sold 20 19MAR11 $132.00 @ 2.85
Comments: Well the selling lasted for a very short period and only fell to 131.61 and roared back to close at 132.27. Obviously this was a mistake so I closed for a small loss. Remember my strategy of building the cash cushion. If you have not read the strategies and how I use apply the spdr hedge, you can read them here.
32.00 5668.00 264 1252.00
Feb 18 11 134.53 Every day the past few sessions this SPDR ETF has set new highs. This can't continue and today looking at the chart below, the candle is shows an undecided stock market. Here I go again. If the stock market opens up, moves higher and then begins to sell off, I will buy spy puts again.        
Feb 18 2011: The chart below shows my ETF HEDGE strategy for tomorrow. I'm going on instinct again. The past few sessions the Ultimate Oscillator keeps flashing the OVERBOUGHT warning. This is normal for the stock market heading this high every day. Meanwhile MACD indicates the uptrend is still in place. However we have had so many up days we are bound to get a down day very soon. Looking at the candle - finally it shows a bit of indecision. We have a long weekend coming up. This could be the break I am looking for. Monday is President's Day so come Tuesday if the stock market opens up, and falls below today's close of 134.53, I will be buying spy puts.


 

Feb 22 11 133.80 The stock market opened (133.12) lower than Friday's close, and climbed to 134.56 on small volume and then more selling.
Bought 20 spy puts 19MAR11 $134 @ 2.97
32.00 (5972.00)    
Feb 22 11 131.75 Sold 10 spy puts 19MAR11 $134 @ 3.80
Comments: This trade worked out well and I closed right near the end of the day. The SPY closed at 131.83 for the day.
However it could have been an error to close as the next two days the stock market continued to sell off.
32.00 7568.00 1596.00 2848.00
MAR 11 2011: Today at the close I bought spy puts. Just 5 spy puts, in case I am wrong, but the chart below indicates to me that the stock market will move lower before it gets better.


 

Mar 11 11 130.80 Bought 5 spy puts 16APR11 131.00 @ $3.05 13.25 (1538.25)    
Mar 14 2011: You can see on the chart below all my reasons why I loaded up on more Spy Puts today.


 

Mar 14 11 130.10 Bought 20 spy puts 16APR11 131 @ $3.80 32.00 (7632.00)    
Mar 15 11 126.73 Sold 25 spy puts 16APR11 131 @5.68 38.25 14161.75 4991.50 7839.50
Mar 18 2011: Bought more Spy Puts today. Looking at the chart the last two up days could be just a lull before we move lower. There is a great deal of uncertainty from Japan and a weekend ahead of us. With options expiry today, perhaps that would account for the stock market moving sideways most of the day.

Mar 18 2011: Early in the morning the oscillator showed overbought and I picked up just 10 Spy puts. I have built up a decent size cash cushion in case I am wrong next week.


 

Mar 18 11 128.66 Bought 10 16APR11 $129 spy puts @ 2.96 19.50 (2979.50)    
Mar 21 2011: Wrong, yet again!  I sold at the open as my chart shows the stock market may try to climb now back to the Feb high and possibly break through. With the news out of Japan regarding their nuclear problem, having been put on the back burner and the allied coalition having been formed against Gaddafi, the stock market is calmer and investors are rushing back in so as not to miss the rebound. This bodes well for my spy puts although if the stock market climbs enough and calms investors' nerves then the VIX will decline reducing my premiums.

Here are two key points from the recent SPY trades that I used and which are mentioned in the 3 strategy papers I wrote on how I use the SPY for hedging. To read those scroll to the top of the pageand go to the SPY INDEX:

1) Staying Just In The Money and 1 Month Out Can Really Assist My Trades:

This morning's loss was $559.00. This is why I stay a month out and slightly in the money. Those spy puts hold their value better and on this morning's move up my loss is contained to $559.00, where those that are out of the money have lost much bigger premiums. Meanwhile those that are deeper in the money have also lost more on the big rally as they tend to reflect the actual movement of the SPY since they are deeper in the money and a lot of the premiums are simply reflecting the actual SPY valuation at the time of being bought or sold.

2) Easing Myself Into The SPY Through Purchasing Groups Of Contracts Not "ALL OR NOTHING"

As well I always try to gauge the stock market sentiment. On Friday we had a declining stock market but it still had jumped higher on the better news out of Japan. It was a "toss-up" whether the stock market would pullback on Monday (today) or move higher. My technicals showed that the stock market would move lower but instead of jumping in and buying 30 spy puts I took my time and bought just 10. The same back on March 11 2011 when I bought just 5 spy puts as the stock market wavered. It was not until the Monday (Mar 14) that the direction was perfectly clear and I bought an additional 25 spy puts.

3) The Importance Of My Cash Cushion

Make no mistake about it though - on May 15 when I sold my spy puts in the downturn the return was better than 54%. Today's loss was 18.7%. These are not small percentages and "trading" the SPY regularly can really hurt the inexperienced investor. This is certainly not something I would do. The Cash Cushion that I build up is so important. I make sure that my trades with the SPY puts are short, usually a day or two and then I close for the profit. It is imperative to me that I build up that profit quickly to cover those times when I am wrong. It is my "insurance" so to speak.

4) Selling Early When The stock market Turns Against Me

My outlook on Friday was that the stock market would move lower. I eased myself into the trade by purchasing just 10 contracts. Yet today was not like last Monday. The stock market moved against me and I closed immediately. This could be a mistake as later in the day the stock market could soften, but I take no chances. This is not gambling, it is investing. I have clear goals, objectives and a clear strategy. My trade was not working out and the SPY is not a stock like KO or JNJ. I use it as a hedge against a stock market downturn only. Premiums are large on the options and can rapidly dissipate. I do not second guess or "hold" waiting to see if the stock market may turn and afford me a smaller loss. I get out because I know there will be other opportunities when I will be right and I know that I am using it solely to hedge myself against a downturn in the stock market. The stock market is not turning down and so the trade is closed. No emotion, no need for alarm. When I have a plan it is easy to make the decisions.


 

Mar 21 11 129.40 Sold 10 16APR11 $129 spy puts @ 2.44 19.50 2420.50 (559.00) 7280.50
Apr 13 11 132.01 Bought 10 21MAY11 $132 spy puts @ 2.52 19.50 2539.50    
Apr 15 11 132.00 Sold 10 21MAY11 $132 spy puts @ 2.50 19.50 2480.50 (59.00) 7221.50
Apr 18 11 130.39 Bought 15 21MAY11 $130 spy puts @ 2.25 25.75 3400.75    
Apr 18 11 129.75 Sold 15 21MAY11 $130 spy puts @ 2.70 25.75 4024.25 623.50 7845.00
Apr 18 11 130.15 Bought 15 21MAY11 $130 spy puts @ 2.47 25.75 3730.75    
Apr 18 11 129.70 Sold 15 21MAY11 $130 spy puts @ 2.71 25.75 4039.25 308.50 8153.50

BELOW IS A SHORT ARTICLE ON HOW I TRADE THE SPY DURING THE DAY FOR "DAILY INSURANCE"
- THIS ARTICLE IS FROM THE AUGUST 10 2010 - You can view the entire 2010 SPDR S&P 500 ETF trading history by going to 2010 SPY TRADES.

Aug 19 10 - Quick overview. I had a few emails just before open this morning asking me about the stock market ( as the jobs numbers continue to look bad and futures were down ) and how to judge buying spy puts for trading. While I have a lot of the details below on this page, nonetheless, here is a look at my trade so far today. I have put a yellow line where I could see the stock market under stress. At that point the SPY was at 109.20. A few minutes later I bought my PUTS. By then the stock market had fallen to 108.94. Then look to the volume and the oscillator. The Oscillator shows oversold within a little over an hour later and the volume began to pick up. I sold my puts after 12:00 when the stock market began to recover from the oversold condition. We could move lower from here, but I have brought in some profit and that's what matters. If options didn't expire tomorrow I would have hold my puts longer, but most options expiry days can provide unexpected results. It is important to remember that in my opinion it is impossible to pick tops and bottoms and get the "ultimate" return. I look to add small gains to my overall spy put cash cushion which little by little will build protection long term for the risk I have taken with my equities. Other traders will buy spy puts on any sign of weakness and hold them over a period of weeks and months as insurance against a steep decline. I am looking for "daily insurance" or insurance for just a few days. As I build my profit I can afford to be wrong sometimes when buying and selling the puts, but I have built a cash cushion that I hope will grow to eventually protect against a major decline should that occur. Because I do short term trading of the spy puts, this means that should the stock market fall drastically I will probably not be as well protected as someone holding puts long term. However I look to my cash cushion to help me in the event that happens and I am not holding spy puts all the way down, but buy and selling short term.

 

 

May 5 11 134.85 Bought 20 $135 18JUN11 SPY PUTS @ 3.24 32.00 (6512.00)    
May 5 11 133.12 Sold 20 $135 18JUN11 SPY PUTS @ 4.04 32.00 8048.00 1536.00 9689.50

May 5 2011 - SPDR ETF Trades
 

Today was again a very easy trade on the SPDR Hedge strategy. The stock market opened lower and the spy options chain was already showing good premiums but by noon, the market had climbed higher. As the SPY moved higher the oscillator indicated overbought and I purchased SPY puts. Sticking with my spy hedge strategy for the past 17 years, I sold a month out (JUNE 2011) and slightly in the money options and selected the SPY PUT $135.00 strike.

 

Stocks could not recover and by afternoon they had climbed back almost to my purchase price, but the oscillator did not show overbought. As the spdr S&P 500 ETF fell towards the close the oscillator again showed oversold. I sold my spy puts as stocks began a small bounce.

 

I will keep posting these SPDR ETF trades as they occur to allow readers the opportunity to keep reviewing them to determine their success rate. You can go back in time and look at previous trades for this year that did not work out and also check out the 2010 SPY Hedge trades. This should help investors determine whether using the oscillator for trading the SPY SPDR ETF has merit or not. As well it should help those who are interested, in perhaps formulating their own strategies or tweaking mine to better suit their own trading comfort level.

 

 

May 6 11 135.44 Bought 20 $135 18JUN11 SPY PUTS @ 2.71 32.00 (5452.00)    

May 6 2011 - SPDR ETF Trades
 

It was obvious from my comments yesterday that I assumed there might be a good bounce today. Overall though the trend is lower after the past 2 days. Therefore to keep working on the SPDR Hedge strategy I waited for the oscillator to indicate overbought and for it to begin to pull back. I will close this trade sometime today. Probably around 3:00 or 3:30 before the end of the day when they market could try to bounce back for the close.

 

 

Below is the chart from the sale of my SPDR PUTS. You can see there is no oversold condition on the SPY, but you must recall that the trade is to keep building up the cash cushion. Remember to read all about the SPDR ETF hedge in order to understand what I am doing here and why.

The important aspect of this trade is to build a large enough cash cushion to protect my US Portfolio from a 10% or 15% decline. This will mean a build up of cash somewhere around 60,000 to 70,000 in capital by the end of the year.

 

May 6 11 133.98 Sold 20 $135 18JUN11 SPY PUTS @ 3.61 32.00 7188.00 1736.00 11425.50

May 12 2011 - SPDR ETF Trades
 

 Again weakness in the market makes for opportunity. By using the Ultimate Oscillator Indicator and adding in MACD I get a better picture. The who purpose of these short trades is to build up a cash cushion, which I do every year, in order to protect the capital that is in use, should the overall market decline. 

 

 

Remember that these trades are short term trades- usually a day or maybe two. When I see the opportunity I take it. In the chart below you can see where I bought the SPY puts. Now you can see where I sold them. The Ultimate Oscillator did not give an oversold indication but at 26.70 it was pretty close, however the MACD was again flat at -0.01. MACD turning to a flat signal usually indicates that the present move is over and a new move will begin. For these reasons I sold my puts.

 

May 12 11 134.05 Bought 20 SPY PUTS 18JUN11  $134 @ 2.81 32.00 (5652.00)    
May 12 11 133.70 Sold 20 SPY PUTS 18JUN11  $134 @ 3.06 32.00 6088.00 436.00 11861.50

May 16 2011 - SPDR ETF Trades
 

 These SPY trades are increasingly easy in a downturn. The Ultimate Oscillator almost went overbought and then pulled back. I waited but with no clear picture I looked to MACD which showed a break in the Divergence to 0.00 from 0.11 earlier in the day. I bought my SPY puts. But when I sold them near the close I was too early. I felt the market might rally into the close as it is important when selling on weakness to remember that this is no bear market, just weakness. That means that buyers will show up and often right near the close when the market looks its weakest. I was wrong today though as the market sold off even lower before a slight rebound at the close. 

 

 

 

May 16 11 134.40 Bought 20 SPY PUTS 18JUN11  $134 @ 2.68 32.00 (5392.00)    
May 16 11 133.38 Sold 20 SPY PUTS 18JUN11 $134.00 @ 3.55 32.00 7068.00 1676.00 13537.50
Jun 2 11 132.00 Bought 20 SPY PUTS 16JUL11 $131 @ 2.70 32.00 (5432.00)    
Jun 3 11 130.43 Sold 20 SPY PUTS 16JUL11 $131 @ 3.61 32.00 7188.00 1756.00 15293.50

JUN 3 2011 - SPDR ETF Trades
 

 I sold my SPY puts in the morning at the open as the market had gapped down on the unemployment news. By 1:00 PM the S&P 500 was trying for a comeback but the overbought signal was there and I waited and then bought as the market began to falter. Selling was easy. I waited for the oversold and then just waited for the SPY to keep falling and then turn around. This was a perfect day for my SPY trade strategy based on the Ultimate Oscillator. 

 

 

 

Jun 3 11 131.22 Bought 10 SPY PUTS 16JUL11 $131 @ 2.93 19.50 (2949.50)    
Jun 3 11 130.40 Sold 10 SPY PUTS 16JUL11 $131 @ 3.57 19.50 3550.50 601.00 15894.50

JUN 9 2011 - SPDR ETF Trades
 

 Today's rally has to be the bounce I mentioned in my market direction call on June 6. It could last a few days, but I doubt it. I really thought this bounce would have started earlier in the week. Today when I charted the week, the Ultimate Oscillator didn't show overbought until almost 3:00 PM. I bought my 20 puts at that time. Remember I have already made a nice cash cushion to protect my trade if it goes the wrong way and this is the bottom and we turn up. Personally looking at my technicals, this rally has to be just a "relief" rally and the market will move lower next week. I have gone all the way to September with my bought puts, just in case the market tumbles another 5 or 6 percent from this level. If it does, then the September puts will have a lot more premium, than just one month out. 

 

SPY Chart Jun 9 2011

 

 

Jun 9 11 129.70 Bought 20 SPY PUTS 17SEP11 $129 @ $4.95 32.00 (9932.00)    
Jun 15 11 127.02 Sold 20 SPY PUTS 17SEP11 $129 @ $6.17
COMMENTS: I sold my SPY puts toward the close of today. I did this not because I believe the market may rally, but to lock in this profit. I may purchase more spy puts in the coming days.
32.00 12308.00 2376.00 18270.50
Jun 16 11 127.71 Bought 10 SPY Puts 17SEP11 $126 @ 3.90
COMMENTS: To read how I selected this strike and my outlook, read more here.
19.50 (3919.50)    
Jun 21 11 128.19 Sold 10 SPY Puts 17SEP11 $126 @ 3.77 19.50 3750.50 (169.00) 18,439.50
Jun 22 11 129.62 Bought 20 SPY Puts 17SEP11 $128 @ 3.95
COMMENTS: I bought 20 puts toward the early afternoon as there was no real follow through from yesterday and with the Fed speaking later I believe the market may pull back.
I will sell half my position if there is a sell off into the close and then hold the rest for Thursday to see if there is more selling.
32.00 (7932.00)    
Jun 22 11 128.71 Sold 10 SPY Puts 17SEP11 $128 @ 4.38 19.50 4360.50    
Jun 23 11 126.44 Sold 10 SPY Puts 17SEP11 $128 @ 5.20
Comments: With the plunge this morning it was obvious that it was time to unload the rest of my SPY puts.
19.50 5180.50 1609.00 20048.50

JUN 23 2011 -
 

 I did not expect a big pull back out of the gate today. I did think there would be some selling but not 200 plus points lower on the DOW. I sold my remaining 10 SPY puts early in the morning as I felt the decline was a little overdone. In the afternoon the market actually began a climb and ended up with a half a percent loss. A very nice recovery.  At the close I could have bought my SPY puts back again, but I didn't.

 

So what is going on? The answer may lie in the VIX. In the chart below the Volatility index shows the March rise in volatility when the Japanese earthquake, tsunami hit and the markets sold off with all the problems associated with Japan. However look at the VIX now. There was a spike up but nothing to indicate alarm as much as the March period. In fact the VIX is declining again. This morning even with the selloff the VIX did climb but to level I would expect with a 200 plus plunge on the DOW. Instead the VIX is still declining from its most recent high.

 

This is a sign of complacency among investors. The number of bulls remains above 30% and therein may lie the problem. Without any kind of panic or serious down move on large volume, most investors seem to feel that this latest correction is simply a short term blip and the market will resume its rise. The VIX reflects their complacency. Therefore the market may still have room to climb and then sell further. Perhaps if it breaks the March lows, we will see a day or two of heavy selling and the number of bulls will collapse below 25%. Then we might be able to put in a bottom. Until then the see saw action may continue.  

 

VIX for the past 6 months

In this kind of environment, I saw no reason to buy my SPY puts back, at the close. I can just as easily wait to see what Friday brings. The strong push up from the lows of the morning could easily mean the market is going to move higher. I still believe if it does, it is a bounce before more selling. Meanwhile though, I see no panic in the market and as such, no reason to jump in and quickly buy back my SPY puts. I have plenty of time to buy them tomorrow or even perhaps Monday.

Jun 27 11 128.26 Bought 15 SPY PUTS 17SEP11 $128 @ 4.52
COMMENTS: Today's rally was poor at best. I have updated my market direction charts which you can view here. I believe it is foolhardy to stay in this market without some protection.
25.75 (6805.75)    
Jun 29 11 129.90 Sold 15 SPY PUTS 17SEP11 $128 @ 3.79
COMMENTS: With the market holding ground there is no need to hold these further. I will consider buying more once the rally ends. See my comments July Rally In The Works?
25.75 5710.75 (1095.00) 18,953.50
Jul 11 11 132.70 Bought 10 SPY PUTS 20AUG11 $132.00 @ $1.95 19.50 (1969.50)    

JULY 13 2011 -
 

 You can read about today's trade within the context of my market direction call for today, July 13, which I entitled One Ugly Chart. I bought my SPY puts around 10:50 AM when I noticed that the XLF had already stopped rallying. I also based today's action on my market call from July 12 RAZOR'S EDGE where I indicated that I believe any rally had to be sold into as overall the market wants to move lower before it can move back up. 

 

S&P500 chart for July 13 2011

Jul 13 11 133.12 Bought 10 SPY PUTS 17 SEP11 $132 @ 3.71 19.50 (3729.50)    
Jul 13 11 131.84 Sold 10 SPY PUTS 17SEP11 $132 @ 4.27 19.50 4250.50 521.00 19,474.50

JULY 15 2011 -
 

 After looking at my charts today and comparing them to past markets at this point in the market, I believe the market will fall through the 1300 easily and retest the 200 day moving average. I purchased additional SPY Puts to hedge my portfolio and take advantage of any additional fall. You can read my reasons and comments and see my charts here.
 

Jul 15 11 131.59 Bought 20 SPY PUTS 20AUG11 $131.00 @ 2.64
AS OF JULY 18 I am now holding just 10 of these puts having sold 10 on July 18 2011
32.00 (5312.00)    

JULY 18 2011 -
 

 Today's action is indicative of investors' nervousness.  Gold pushed easily through $1600 US an ounce as investors and world governments hedge themselves against further deterioration of the Euro, sovereign debt woes and the US Debt Ceiling issue.

The chart below shows today's action until around 1:30 PM. I was holding 30 SPY puts at the open after buying them on Friday following my market direction call for more weakness in the markets.

I always feel it is better to keep taking profits when they appear and by holding onto a few spy Puts I still can take advantage of any further downturn during the rest of the week.

The market remains soft, but it isn't time for a collapse yet. Earnings are strong still and it truly is more a matter of:

1) Many stock are overvalued. This has to get worked through before stocks can move higher. That means consolidation and for many investors, consolidation can hurt.

2) The Euro Sovereign Debt Crisis is a never ending problem. Last week I wrote Death By A Thousand Cuts dealing with the Euro Crisis and this article dealing with the Greek Debt Crisis.  Once they kick the trouble down the road, this will alleviate some of the concern among investors.

3) The US Debt Ceiling debate. Once this gets resolved another anxiety related issue will be removed.

Don't get me wrong. This market has a lot of trouble ahead of it and I am expecting more volatility, move pullback, more bounces and certainly I think a retest of the 200 day moving average. For this reason I am still holding onto the remaining 10 SPY puts.

To read more on today's trade, read Investors' Nervousness here.

 

Jul 18 11 129.93 Sold 10 SPY PUTS 20AUG11 $132 @ 3.92 19.50 3900.50 1931.00 21,405.50
Jul 18 11 129.97 Sold 10 SPY PUTS 20 AUG 11 $131 @ 3.47 19.50 3450.50 794.50 22,200.00

JULY 21 2011 - Market Must Not Re-Test The 50 Day Moving Average Again
 

 While Wednesday was a lack luster day and I really couldn't see the market running a lot higher, the market took off in the morning and I sold my remaining 10 SPY Puts for a loss. Judging market trends is always tough and I am wrong as many times as I am right. I believe insurance is important, but right now the market may go sideways and it may even pull back a bit, but unless it falls below the 50 day moving average I think the trend is sideways to up. If though we should pull back to the 50 day moving average, then I believe it will be time to buy spy puts again. As well should the market pull back to the 50 day again, it will be a very bad sign and most likely the beginning of a major pullback which could actually signal the end of the bull market. Let's hope there is still upside left in this bull market.

 

Jul 21 11 133.31 Sold 10 SPY PUTS 20AUG11 $131 at 1.65 19.50 1630.50 (1025.50) 21,174.50

JULY 25 2011 - Market is bound to retest 50 day.
 

 With the disappointing infighting over the US Debt Ceiling, I just have to believe this market will retest the 1310 on the SPX. I therefore bought 20 SPY puts for a day or two. If the market breaks the 1310, then it will probably break the 50 day and this is the third time. Since beginning investing over 35 years ago, it is a rare event with the market can break the 50 day 3 times in a row and not fall from there.

 

Jul 25 11 133.70 Bought 20 SPY PUTS 17SEP11 $133 at $3.62 32.00 (7272.00)    
Jul 27 11 131.01 Sold 20 SPY PUTS 17SEP11 $133 at $4.98 32.00 9928.00 2656.00 23830.50
Jul 28 11 131.55 Bought 15 SPY PUTS 17SEP11 $131 at 3.77
COMMENTS:
Not as big a bounce as I anticipated in last night's market direction call. Nonetheless I bought puts and then sold 10 of them toward the close of the day. I am holding 5 overnight to see if we get a drop in the morning. The selloff during the day is certainly not bullish.
25.75 (5680.75)    
Jul 28 11 130.15 Sold 10 SPY PUTS 17SEP11 $131 at $4.49 19.50 4470.50    
July 29 11 129.00 Sold 5 SPY PUTS 17SEP11 $131 at $5.22 13.25 2596.75 1386.50 25217.00
Aug 2 11 128.11 Bought 30 SPY PUTS 17SEP11 $128 @ 3.87
I believe investors might consider SPY Puts to protect their positions. With the market this high there is a lot of room for the market to fall. Just be aware that after 7 days of growing selling, the chance of a bounce is very high.
44.50 (11654.50)    
Aug 2 11 125.77 Sold 30 SPY PUTS 17SEP11 $128 at $5.10 44.50 15255.50 3601.00 28818.00
Aug 4 11 124.06 Bought 30 SPY PUTS 17SEP11 $124 at $4.02 44.50 (12104.50)    
Aug 4 11 121.35 Sold 30 SPY PUTS 17SEP11 $124 at $6.34 44.50 18975.50 6871.00 35689.00
Aug 5 11 121.70 Bought 20 SPY Puts 17SEP11 $121 at $4.24 32.00 (8512.00)    
Aug 5 11 117.10 Sold 20 SPY Puts 17SEP11 $121 at $6.90 32.00 13768.00 5256.00 40945.00
Aug 5 11 120.00 Bought 20 SPY Puts 17SEP11 $120 at $5.20 32.00 (10432.00)    
Aug 9 11 112.30 Sold 20 SPY Puts 17SEP11 $120 at $10.23 32.00 20428.00 9996.00 50941.00
Aug 31 11 122.50 Bought 20 SPY Puts 22OCT11  $122 at $4.79 32.00 (9612.00)    
Sep 2 11 118.22 Sold 20 SPY Puts 22OCT11 $122 at $7.15 32.00 14268.00 4656.00 55,597.00
Sep 6 11 115.59 Bought 30 SPY Puts 22OCT11 $115 @ 5.37 32.00 (10772.00)    
Sep 6 11 114.75 Sold 20 SPY Puts 22OCT11 $115 @ 5.87 32.00 11708.00 936.00 56533.00
Sep 9 11 116.52 Bought 40 SPY PUTS 22OCT11 $115 @ 5.19 57.00 (20817.00)    
Sep 12 11 114.25 Sold 10 SPY PUTS 22OCT11 $115 @ 6.21
Comment: This leaves me with 30 SPY Puts still being held
19.50 6190.50    
Sep 14 11 117.60 Sold 10 SPY PUTS 22OCT11 $115 @ 4.45
Comment: I was stopped out at $4.45 - I have moved the remaining 20 stops higher
19.50 4430.50    
Sep 15 11 119.67 Sold 20 SPY PUTS 22OCT11 $115 @ 3.27
COMMENT: I was stopped out again ending the SPY Put trade. Obviously the market is moving higher at this stage. This is the great thing about the cash cushion I build throughout the year. When I am wrong, such as on this purchase of the SPY Puts, it protects me from the losses.
To read an extensive article about this trade and the loss taken, click here.
32.00 6508.00 (3688.00) 52845.00
Sep 16 11 121.88 Bought 10 SPY PUTS 22OCT11 $122 @ 4.37 19.50 (4389.50)    
Sep 16 11 120.66 Sold 10 SPY PUTS 22OCT11 $122 @ 4.92
To review this trade you can read my comments and charts here:
19.50 4900.50 511.00 53356.00
Sep 16 11 121.60 Bought 20 SPY PUT contracts 22OCT11 $122 @ 3.90
Comments: I plan to hold these over the weekend. You can read further here:
32.00 (7832.00)    
Sep 19 11 118.91 Sold 20 SPY PUT contracts 22OCT11 $122 @ 5.25 32.00 10468.00 2636.00 55992.00
    COMMENTS: Read the comments regarding the September 22 2011 trade here.        
Sep 22 11 113.56 Bought 20 SPY PUT contracts 22OCT11 $113 @ 4.42 32.00 (8872.00)    
Sep 22 11 113.12 Sold 20 SPY PUT contracts 22OCT11 $113 @ 4.99 32.00 9948.00 1076.00  
Sep 22 11 113.31 Bought 20 SPY PUT contracts 22OCT11 $113 @ 4.69 32.00 (9412.00)    
Sep 22 11 112.86 Sold 20 SPY PUT contracts 5.21 32.00 10388.00 976.00 58044.00
Sep 30 11 115.15 Bought 30 SPY PUTS 19NOV11 $115 for $6.05 44.50 (18194.50)    
Sep 30 11 114.19 Sold 10 SPY PUTS 19NOV11 $115 for $7.05 19.50 7030.50    
Oct 3 11 112.13 Sold 20 SPY PUTS 19NOV11 $115 for $7.30 32.00 14568.00 3404.00 61448.00
Oct 3 11 113.48 Bought 20 SPY PUTS 19NOV11 $113 for 5.92 32.00 (11872.00)    
Oct 3 11 111.01 Sold 20 SPY PUTS 19NOV11 $113 for $7.15 32.00 14269.00 2396.00 63844.00
Oct 3 11 110.97 Bought 20 SPY PUTS 19NOV11 $111 for $6.27 32.00 (12572.00)    
Oct 3 11 110.37 Sold 20 SPY PUTS 19NOV11 $111 for 6.89 32.00 13748.00 1176.00 65020.00
Oct 19 11 122.60 Bought 20 SPY PUT Contracts 19NOV11 $121 for $3.31 32.00 (6652.00)    
Oct 19 11 120.95 Sold 20 SPY PUT Contracts 19NOV11 $121 for $4.21
Select this SPY PUT link to read today's trade comments
32.00 8388.00 1836.00 66856.00n
Nov 9 11 125.12 Bought 20 SPY Put Contracts 17DEC11 $125 for $4.88 32.00 (9792.00)    
Nov 9 11 123.05 Sold 20 SPY Put Contracts 17DEC11 $125 for $5.93
Select this SPY PUT link to read today's trade comments.
32.00 11828.00 2036.00 68892.00
Nov 17 11 123.55 Bought 10 SPY PUT Contracts 21JAN12 $122 @ $6.05 19.50 (6069.50)    
Nov 17 11 121.89 Sold 10 SPY PUT Contracts 21JAN$122 @ $6.55 19.50 6980.50 911.00 69803.00
Nov 18 11 122.45 Bought 20 SPY PUT Contracts 21JAN12 $122 @ $5.91
Comments: To view why I purchased these puts to old over the weekend read this SPY PUT trade article.
32.00 (11852.00)    
Nov 21 11 118.95 Sold 20 SPY PUT Contracts 21JAN12 $122 @ 7.37
Comments: To read about this SPY PUT Trade select this link.
32.00 14708.00 2856.00 72659.00
Nov 22 11 119.80 Bought 20 SPY PUT Contracts 21JAN12 $120 @ $6.51 32.00 (13052.00)    
Nov 23 11 117.22 Sold 20 SPY PUT Contracts 21JAN12 $120 $7.56
Comments: To read about this SPY PUT Trade select this link.
32.00 15088.00 2036.00 74695.00
Dec 12 11 124.04 Bought 20 SPY PUT Contracts 21JAN12 $123 @ $3.88 32.00 (7792.00)    
Dec 12 11 123.37 Sold 20 SPY PUT Contracts 21JAN12 $123 @ $4.38
COMMENTS: To read about this SPY PUT TRADE select this link.
32.00 8728.00 936.00 75631.00

SPDR S&P 500 ETF STRATEGIES EXPLAINED:
A) THE SHORT VERSION: 4 Steps using the oscillator
B)
STRATEGY 1: When I can watch the market throughout the day
C)
STRATEGY 2: When I am unable to watch the market during the day


VIEW SPDR ETF TRADES BY YEARS:

SPDR-2011
SPDR-2010

 

 

 

 

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