FullyInformed.com
Generic filters

SPY PUT Options Held Overnight Can End With Unexpected Losses

Jun 26, 2012 | SPY ETF Hedge Strategy (SPY)

Today’s market direction stayed positive and tried hard to rally. But this was to be expected after such a heavy down day on Monday and I was waiting to purchase spy put options to hedge my portfolio going into Wednesday and Thursday.

My market timing analysis from Monday after the markets closed showed the possibility of a rally and then once again more selling. That meant a rally for Tuesday which is what happened today and then more selling into the rest of the week.

SPY PUT OPTIONS Purchased

With my market timing analysis in mind I watched for a strong overbought indication in the Ultimate Oscillator all day to buy spy put options.

You can see in the chart below there were two overbought signals but neither were extreme. As the market was climbing and as I needed to purchase as high as possible, it was prudent to wait for an extreme overbought reading.

I got the reading around 2:30. I missed the top but purchased my spy put options as the S&P pulled back.

The chart below shows the day’s activities. You can see how much more extreme the Ultimate Oscillator overbought reading was when I purchased my spy put options than at any other time during today.

Spy Put Options Bought

SPY PUT Options Could Be A Wrong Trade

Despite my market timing analysis indicating that selling will continue in stocks after today, there is always room for error. Something positive could come out of Europe or an economic report on Wednesday could surprise to the upside.

That is the chance taken when buying spy put options to hold overnight. I prefer to buy my spy put options when the market direction is already moving lower. I then wait for a bounce and buy to profit as the market continues moving lower during the day.

But buying spy put options a day in advance has distinct advantages including a better chance of a larger profit should the market gap down at the open.

The spy put options trade is my method of hedging and with today’s rise in the market I bought at a prime moment which hedges my portfolio fairly well for Wednesday’s market.

If the market turns up and shows strength I can always sell my spy put options for a small loss since I have built up a consider cash cushion already.

Related Articles

SPY ETF Hedge Trades And Intraday Market Updates For Wed Nov 4 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Wed Nov 4 2026 following the mid-term elections on Tuesday. I updated the support and resistance levels that will be used today. I take profits as they appear, as …

SPY ETF Hedge Trades And Intraday Market Updates For Tue Nov 3 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Tue Nov 3 2026 following the indexes giving back Monday’s rally which is quite bearish. I updated the support and resistance levels that will be used today. I take …

SPY ETF Hedge Trades And Intraday Market Updates For Thu Oct 22 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Thu Oct 22 2026 following a third rally on Wednesday Today should be choppy but with a good chance for deeper dips. These should prove profitable for SPY ETF …

SPY ETF Hedge Trades And Intraday Market Updates For Tue Oct 20 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Tue Oct 20 2026 following a bounce on Monday. Today we get to find out if the bounce has any staying power. I updated the support and resistance levels …

SPY ETF Hedge Trades And Intraday Market Updates For Mon Oct 19 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Mon Oct 19 2026 following last week’s drop in the SPX and NASDAQ indexes which were the worst week since the first week of June. This will see higher …

SPY ETF Hedge Trades And Intraday Market Updates For Thu Oct 15 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Thu Oct 15 2026 following yesterday’s market sell-off. I also updated the support and resistance levels that will be used today. I take profits as they appear, as markets …

SPY ETF Hedge Trades And Intraday Market Updates For Tue Oct 13 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Tue Oct 13 2026 ahead of bank earnings due out today before markets resume trading. I also updated the support and resistance levels that will be used today. I …

SPY ETF Hedge Trades And Intraday Market Updates For Mon Oct 5 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Mon Oct 5 2026 following a strong rally on Friday on the back of lower than expected September jobs numbers. I take profits as they appear, as markets are …

SPY ETF Hedge Trades And Intraday Market Updates For Fri Oct 2 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Fri Oct 2 2026 following a sideways day of trading. Make sure to read the Opening Trade Notes for today and review the support and resistance levels currently in …

SPY ETF Hedge Trades And Intraday Market Updates For Tue Sep 29 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Tue Sep 29 2026  following a lower day on Monday. Make sure to read the Opening Trade Notes for today and review the support and resistance levels currently in …

SPY ETF Hedge Trades And Intraday Market Updates For Fri Sep 25 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Fri Sep 25 2026  following a rather wild day of swings on Thursday. Make sure to read the Opening Trade Notes for today and review the support and resistance …

SPY ETF Hedge Trades And Intraday Market Updates For Wed Sep 23 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Wed Sep 23 2026 following a very choppy session on Tuesday ending in a flat close with the SPX virtually unchanged from Monday’s close. Make sure to read the …

SPY ETF Hedge Trades And Intraday Market Updates For Tue Sep 22 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Tue Sep 22 2026 following a strong rally on Monday leaving the SPX within easy striking distance of a new high. Make sure to read the Opening Trade Notes …

SPY ETF Hedge Trades And Intraday Market Updates For Mon Sep 21 2026

Here are the SPY ETF Hedge Portfolio opening trade notes for Mon Sep 21 2026 which looks at the expected market action in the SPX today. Make sure to read the Opening Trade Notes for today and review the support …