VIX6 – SPX Trade
Good day Insiders,
Well, we got a bounce of +650 Dow points and post yesterdays drop, we look to be heading into the weekend full of dry eyes and skies. This is all in hopes of the government no longer being shut down as the Democrats are looking to have a bill passed which President Trump is determined to veto if the funding for his wall is not included. Add on the China trade talks which are set to take place the 7th and 8th (Monday and Tuesday) of the coming week and one has to be wary of this run higher. I personally do not believe we are out of the woods, yes this bounce was necessary and to some level expected but may indeed be time to go back to the good old, sell bounce.
I would love to buy a nice wide put spread going into the weekend of the unknown but I am of the opinion there is a wiser course of action. I am going to sell the 2615-2625 call spread to take advantage of this bounce and time decay over the weekend.
Risk & Reward
Using $8,500 in margin, so long as we stay below 2615 over the next 2 weeks we yield a 16.7% ROC.