SPY PUT Trade Returns 47% In Overnight Trade – Sept 10 2014

Sep 10, 2014 | Profit And Income Strategies, SPY ETF Hedge Strategy (SPY)

Yesterday I purchased Spy Put Options for what looked like a move lower on Tuesday. When the SPX broke through 1994 and then 1990 I held the spy put options overnight. This is rare for me as the spy put options is normally a single day trade. The whole strategy is building a large cash cushion for those periods when the market will pullback or even correct. The SPY Put options trade can easily earn build a large enough cash cushion to protect my entire portfolio by 10 percent or even 20 percent annually.

Spy Put Options Overnight

But it is often dangerous to hold Spy Put Options overnight especially in a bull market. When a bull market pulls back, the tendency of the majority of investors is to look at every dip as a buying opportunity. The bigger the dip may be, the more investors can be drawn into “buying the dip”. This can propel stocks back up, as we saw today, and my spy put options can quickly lose value.

Staggered Spy Put Stop-Loss Strategy

To counter this and to allow me to hold spy put options overnight, I developed two decades ago a simple strategy of setting up staggered stop-losses to both profit from downturns and to protect capital invested from losses if I am wrong and the market direction swings back to up, as it did today.

Spy Put 47% Returtn Overnight

The proof of the value of this strategy can be seen in the returns. Yesterday’s trade for example, returned 47% today despite the market direction turning back to up mid-morning and closing positive on the day.

Spy Put Strategy Article

This Spy Put Strategy article is 1500 words in length and qill require 6 pages if printed. It is designed for those interested in actively trading the Spy Put Options during periods of weakness. It can easily be adapted for periods of strength as well when the Spy Call Options would be the product used to benefit from rises in market direction.

The rest of this article is for USA members.

SPY PUT Trading Strategy Article

This FullyInformed USA Members Spy Put Strategy article can be directly accessed through this link or USA Members can login here. Non-members can join here or read about the benefits of a membership.

Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.