VIX6 – SPX Trade #5 Update #1
Good day Insiders,
At the beginning of the day, it looked as though we were finally going to see some reality in this market. Then the Fed spoke, and apparently, this market has not seen enough buying and even with there being no good news out there, all we do is keep going higher so why fight the trend. We are going to adjust our trade by rolling it out to next week for no cost or added risk. In addition to this adjustment, we are going to go with the trend of the market and sell ITM puts against our short calls. Though I am not a fan of doing this until we have a definitive direction, there no fighting the strength of this market.
Rolling this out a week and a few strikes up, will bring in a credit of 0.75 and add no risk to the trade.
We are likely to test the highs recently seen this week. We will play this trend and look to scalp (chip away at) a few bucks as this trend is clearly favouring upside momentum. This adjustment will bring in a credit of $2325.
Risk & Reward
Our ending risk graph looks something like this (for now). Recall that we had $10k of risk in the trade, that has now gone down to $5k. Also note that should this trend keep going, we look to make a health $5k profit in the event the SPX lands between here and 2875. There will be adjustments to follow provided the market moves.