In and out with the big jump on Wednesday

Updated: Jan 21st, 2013 | Vance Harwood

At 9:51 EDT Wednesday I was setup for a couple days with my purchase at  of SPY at 106.73, long S104  3-Sept puts at .23 and short S107 3-Sept calls at 0.80  for a breakeven of  106.16 and a max profit of  0.84.

Twenty minutes later I closed out SPY at 108.11, S104 puts at .08, and bought back my calls at 1.62 for a net credit of  106.57,  a net profit of 0.41 per share.     With almost half the available profit available that quickly I couldn’t justify holding onto the position.




SPY 31-Aug and 1st of Sept 2010



Are we at the bottom yet?

Updated: Aug 25th, 2010 | Vance Harwood

After several sell-off days with low volume, the buyers seem to be coming back.  I bought SPY at 105.22, sold 27-Aug 106 calls at 0.58. Breakeven is 104.64. Maximum profit is $1.36 per share.

Livevol shows the 27-Aug 106 IV’s at 28 and the 18-Sept monthly IV for the 106 calls at 24.  Right now, Livevol’s IV numbers are the only ones I believe for the CBOE Weeklys options.

Six hours to go

Updated: Aug 9th, 2010 | Vance Harwood


Well, I was clearly wrong about people not being in panicky mood.   Around 10:30 EST the market decided to take another leg down and the VIX did spike up quite a bit.   Later in the day the market rallied back to around the point I created this position.    I bailed out of my position less than an hour after I created it, before the leg down,  because I didn’t like the way the market was acting. Took a net profit of 0.26 per share and was glad to have it when the market tanked a few minutes later.


This morning’s job report, while worse than predicted, was hardly evidence for Armageddon so I think the early market blow off is probably most of the action for the day.  The relatively small blip in VIX confirms that people are not in a panicky mood–besides, who wants to panic on an August Friday?

I like creating covered call positions when the underlying is right at the strike price.  The ATM calls have their maximum premium at that point, an underlying move in either direction decreases the premium.   I bought SPY at 112.01 and sold 112 strike calls (weekly options expiring today) at 0.50.   Break even is 111.51, and the best case profit is 0.49  (.43%).

The gamma certainly is high on expiration day.  SPY is now at 112.45 and the 112 option premium is down to 0.20.

Two days to go

Updated: Aug 5th, 2010 | Vance Harwood

I’ve been staying out of the market (except for USO), because I think the possibility of a pullback is fairly high.    However, with two days to go on the SPY Weekly 6-August options (which are showing IVs in the 30s)  things started looking attractive.   I created an ITM covered call position, buying SPY at 112.45 and selling 111 strike calls at 1.84.   I did sequential orders, with the SPY buy being a market order, and then a limit order to sell the calls.    SPY did a nice little up move after I bought the stock, I was going to put in an order at 1.74, but after a few minutes I was able to get a fill at 1.84.  Break even on this position is  SPY at 110.61, best case profit is 0.39 per share (0.35%) which will occur if SPY closes at 111 or above tomorrow.

February SPY close-out

Updated: Feb 19th, 2010 | Vance Harwood

I closed out my SPY Feb 111 buy-write position a little early today.  It would have probably closed in the money, but I didn’t like the way the market was behaving for a position that was only a few tenths in the money.   Sold SPY at 111.23 and bought back the calls at .36 for a net credit of 110.87.  Overall profit was 2.44 per share–a nice return.