Created a covered call position today with SPY at 106.89 and 107 SPY calls expiring this Friday–the 23rd. The calls sold (to open) at 1.18, giving a 1.2% best case profit for the week if SPY closes Friday above 107. Fidelity supports trading these weekly options, but apparently Schwab does not.
On July 15th the closing price of SPY was only $1.12 away from the July 15th, 2004 closing value of SPY. The last crossover between the two price histories was in late May, but it wouldn’t take much of a rally to put 2010 on top again.
The last 3 days have provided a respite, but in general the market has not been kind to the bulls this summer. As in 2004, the 2010 bottom trendline has not proved to be a impermeable barrier–with a SPY close of 102.2 last Friday providing a convincing accent. Six years ago the market reversed its negative summer slide starting in August–are we three weeks early this …
Anyone that trades options knows that the pace quickens the last few days before expiration. The delta (the change in option price relative to the underlying) for the ATM option is still around .5, but instead of gradual changes for the deltas on the strikes in / out of the money, the curve starts resembling a step function, going from zero for out-of-the-money, to …
Redirected to SPY dividend. I continue to monitor the correlation between the 2004 values of SPY v.s. the 2010 version. The summer of 2004 was a sideways, slightly declining market and the summer of 2010 seems to be following suit. I was curious how the US treasury interest rates between the two periods compared, so I looked up some data. The yield …
