Was this post helpful?

This “Trade Trudging” week will focus on rolling one of my expiring QQQ Spreads that is currently deep ITM. And since this is the second time I’m rolling this Vertical Spread, I’m pretty sure this QQQ is following me.

The specs aren’t on the grey market, the black market, or any other market.
And all i keep hearing is there’s never been a system like this.
I blew all my buy money, my bribe money, 4 of my best I.D.s and I am no where.
Not only am I no where,
but I’m pretty sure I’m being followed.

Linus Caldwell (Movie: Ocean’s Thirteen)

Rolling QQQ Vertical Spread

Linus Caldwell
(Movie: Ocean thirteen)

This Trade Trudging week, I can relate to Linus’ frustration as I try to figure out what to do with a deeply ITM QQQ Vertical Spread expiring this Friday. I’ve looked for rolling opportunities in every forward week and all Short-Strikes. And since this is the second time I’m rolling this Vertical Spread, I’m pretty sure this QQQ is following me.

First I need to look at where this QQQ Spread has been

The original Vertical Spread:
QQQ:365p/345p  – Open 12/27/21 – Expires 02/04/22 – Max Gain = $127.00- Open Price = $401.79

This Spread started out with an 84.1% Probability of OTM and with a Short Strike of 9.1% below the current QQQ price. The 4-month trend channel was bullish, the 2-weeks trajectory was bullish, the 1-week trajectory was bullish and the 9-Day SMA was above the 50-Day. Omicron was on the decline and the deficit-busting spending bill, Build Back Better, was busted. From most practical observation, this Spread was relatively safe.

But Market Madness happened and by Jan 25, 2022, QQQ has fallen by 14.1% to $345.01.

On Jan 25, the Short Strike’s Prob-OTM of my QQQ Spread fell to a dismal 14.6% and the underlying was now 6.3% below the Short Strike. 10 days before its expiration, it was obvious that my Feb. 4th QQQ Spread would not make it. So I rolled it to:

QQQ:350p/310p  – Open 01/25/22 – Expires 03/18/22 – Max Gain = $1,309 – Open Price = $358.30

The construction of this rolled Spread had a much improved Short Strike of 350 and a new expiration date 49 days away. I was confident that the market dip had mostly run its course and this new Spread was safe – HA!

Second, I need to look at where this QQQ Spread is now

Closing the original QQQ:365p/345p cost my Trading Account $1,270. But that debit was more than offset by the $1,309 credit from the newly rolled QQQ:350p/310p. Thus, that rolled transaction added $39 to my trading account.

The accumulative transactions this far were:

  • 12/27/21 Entered QQQ:365p/345p: Credit $127.00
  • 01/25/22 Exited QQQ:365p/345p: Debit $1,270.00
  • 01/25/22 Entered QQQ:350p/310p: Credit $1,309
  • Gross return for the effort: Profit $166

So after this rolled transaction, I was happy. Then…

Third, I need to look at where this QQQ Spread is heading

On Monday of this week (03/14/22) QQQ had continued to fall another 10.4% to $320.98 since the 01/25/22 roll, and is now 7.3% below my Short Strike. My rolled QQQ:350p/310p Spread now has a 99% chance of being assigned this Friday (if not sooner). So not I need to find options pretty fast.

What would happen to my Vertical Spread if QQQ stays flat for this week, closes at the current value of $320.98, and the Short Strike assigned?

  • Premium paid from assigned 350 Short = $350 – $320.98 current price = $29.02 * 100 shares = -$2,902
  • Premium collected from 310 Long = $0. (expires worthless)
  • Premiums collected to date = +$166.00
  • Current Time Value = $0.00
  • Net loss for the effort = -$2,736.00(no bueno!)

To roll this losing Spread this week, I need to consider my ‘break-even’ price. A newly rolled Spread (that expires worthlessly) needs to cost no more than $166 to open. But for my expiring QQQ Spread, breaking even is highly unlikely. And since all the trajectories for QQQ continue to be strongly bearish, it is likely to be even worse by Friday. I need to be ok with giving up a few hundred dollars in order to avoid losing a couple of thousand.

Time Value

Time Value can be a two-edged sword. But in this QQQ roll, it works for me.

Allowing my QQQ:350p/310p Vertical Spread to expire In-the-Money (ITM) will debit my trading account $2,902 (assuming QQQ stays flat through this week). But closing 4 days early I will also have to pay the value of the remaining time until this Friday’s expiration. Fortunately, the Time Value for my failing QQQ Spread is negative thus providing me an early-out discount.

An easy way to calculate Time Value is to multiply the premium I would pay should I elect to close the Spread right now (current premium = $26.77 * 100 shares = $2,677). Then deduce the Time Value by subtracting the now cost of closing the Spread (-$2,677) from the future cost assigned at expiration (-$2,902) to get -$255 (-$2,902 + $2,677 = -$255).

The Time Value for this ITM QQQ Vertical Spread should I close it right now = -$255.

Thus closing my QQQ:350p/301p Spread 4 days early will save me $225 (again, assuming QQQ stays flat over the next 4 days).

 I don’t want the labor pain.
I just want the baby.

Willy Bank (Movie: Ocean Thirteen)
Willy Bank
(Movie: Ocean Thirteen)
Using Excel with ThinkorSwim
Walking through steps of installing thinkorswim on a new laptop and how to get Excel to pull live data …
How To Make Loss Resistant Vertical Spreads – Strike Width
In this week's journal entry, I want to look at what makes a Loss-Resistant Vertical Spread. Starting with a …
Vertical Spread Assignments – The Good The Bad and the Ugly
At what point do I need to sell an ITM Spread early for a loss or just let the …

This Week’s Market Sentiment

This Market Sentiment Section is typically completed by midday Monday morning. By the time this journal is published, it will be a week old.

(As of 03/14/2022)

This section reviews five indicators: Ecopolitical events, VIX, Put/Call Ratio, Consumer Sentiment Index, and the S&P 500, and how these could affect the market’s direction. I will use these indicators to help guide my trading decisions for this week.

Each of my five indicators will “vote” on a DEFCON (Damocles Options Trading Readiness Signal) level, exclusive to that indicator. Then, In the final sub-section, “My sentiment for this coming week” below, I’ll compile the votes into a DEFCON level for the week.

Ecopolitical Tree Shakers (ETS):

Ecopolitical (Sociopolitical-Economics) Tree Shakers (ETS) can be breaking news, political machinations, Federal Reserve musings, or even Twitter Trends. They are events that can abruptly change the dynamics of the current markets. U.S. political polarization’s impact on Wall Street cannot be glossed over.

ETS is like a lit fuse to a bomb. The fuse can be fast or slow, and the bomb can easily be a dud. But I need to watch this closely as an indicator. The ETS can significantly disrupt all the other indicators at the drop of a hat.


  • Russia/Ukraine still dominnating financial news – Yikes
  • Inflation/Interest Rates cast dark shadows over my at-risk Spreads – Yikes
  • High likelyhood of Russian Bond default – Yikes
  • Expect a quarter-point interest hike this Wedn
  • Federal Ominibus Bill to fund the governement for the remaineer of the year past – Yay
  • WTI oil price are taking a hugh tumble early this week – Yay
  • A surreal lack of partisan bikkering in Congress – Yay
  • Federal Reserve to review Crypto – Interesting

Geopolitical

  • Crushing war-time sanctions and global isolation of the Russian economy is pushing the Russian debt towards default. Their bonds have already been reclassified as junk and are being dumped at unprecedented speed. US Bond funds that include Russia’s sovereign debts, such as Voya, PIMCO, and Capital Groups American Funds, stand at risk of a selloff.
  • Russia is threatening a widespread retalitory seizure of assets and the nationalization of foreign companies.
  • After surpassing $120/bbl, WTI oil prices fell off the cliff and within a couple of days dove down below $95/bbl. This may be an affirmation of a change in the Russia/Ukraine war.
  • Are we starting to see the beginning of the end of the US Dollar dominance in the world’s economy? After the show of US’ sanction power over Russia, all the world leaders are geting a lesson in how the US can cripple any economy. Eventually, the collective reasoning of all the economic leaders will agree that no one country should have that much power. – Prediction: Start to see a global push to make cryptocurrency (a form of) the go-to currency in times of risk instead of the dollar.

Socioeconomics 

  • Congress passes the omnibus appropriations bill to fund the current fiscal year. It was done so without another continuing resolution and without the ambulance-chasing media yelling “Fight, Fight, Fight” like a elementary schoolyard tussel.
  • Many of the Progressive left’s demands from the failed Build Back Better bag that were tagged to the year’s Omnibus Bill, were jettison. New debit spending for COVID aid (while there are still many billions still idle from earlier pandemic aid packages) and overhauling policing were nixed. This is showing that the croning from the ridiculous Congressional Progressives is starting to fade.
  • With inflation reaching 8% and Russian war sanctions hitting their stride, it’s going to be tough for the Feds to start raising interest rates. An expanding economy (from the COVID ground zero) is necessary to get folks back to work. And it can be counterproductive if the increased interest rates cause people to not engage in buying/selling. The economy needs to continue to expand while interests are slowly adjusted.
  • Federal Reserve is considering regulation of cryptocurrency and exploring Central Bank approved digital dollars.

Most ETS items appear to have legs. So what is depressing the markets now may continue to do so. But it also seems that we may have reached the limit of the Marketeer’s patience towards the current market correction and hopefully we won’t lose too much more ground over the next few weeks.

ETS votes optimistic DEFCON 3

VIX: Broad Market Volatility

The VIX is an emotion-gauge for the general investing population. It is thought to be driven by the Marketeers’ current level of greed or fear. As one-month forward-looking volatility, it is not designed to tell us which direction the market will move but rather how fast it can get there.

A VIX of 15% is assumed to be a market at rest. Since the intrinsic nature of the Stock Market is to move up, a VIX close to 15% or below will correspond with the market’s innate tendency to rise.

ThinkorSwim Chart: CBOE Market Volatility Index (VIX) - 03/13/2022
- OptionsTradesByDamocles.com
ThinkorSwim Chart: CBOE Market Volatility Index (VIX) – 03/13/2022

The 1-month trajectory of the VIX Regression Channel continues an aggressive tilt-up as the Marketeers assess the ETSs.

  • Last week the VIX ended at 32.4%, up from the previous week of 32.0%.
  • The current VIX fell below the 9-Day SMA, but the 9-Day SMA is well above the 50-Day SMA
  • The 50-Day is 47% above the 15% and falling.

By mid-week, the VIX made a new 52-week high of 36.45% before nose-diving to end at 30.75%. This is affirming that we are still in times of high volatility and a high degree of market uncertainty – and the Marketeers hate uncertainty.

Being blind to all other indicators, I will vote for a DEFCON level 3

VIX votes a DEFCON 3

Put/Call Ratio:

Put Options are frequently used as protection against existing investments falling. When the ratio between Put Options bought versus Call Options bought is above 1, this is an indicator that the Marketeers are buying insurance to what they may see as declining Markets (or a pending Market collapse). Conversely, when the Put/Call Ratio falls below 1, there is a general sense that the broader Markets will increase, and more investors are buying more than selling.

ThinkorSwim Chart: S&P 500 Put/Call Ratio - as of 03/13/2022
- OptionsTradesByDamocles.com
ThinkorSwim Chart: S&P 500 Put/Call Ratio – as of 03/13/2022
  • The S&P 500’s Put/Call Ratio spent most of last week in the “Good Shape” region
  • The end of the week value of .75 is a slight jump from 0.74 last week
  • The 9-Day SMA was mostly flat from last week – ending value of 0.66
  • Current ratio flew up above the 9-Day SMA and the 9-Day is still above 50-Day SMA

Last week’s Put/Call Ratio ended by peeking into the “Nervous” zone. This is suggesting that a goodly number of Marketeers are concerned that the Feds can’t raise interest rates without a retraction in economic production. And since the last three days of last week were more pessimistic, it may seem reasonable that that will carry into this week.

The shiny star of the Put/Call Ratio indicator is getting smudged!

Being blind to all other indicators, I’ll vote for a cautious DEFCON 4

Put/Call Ratio votes a cautious DEFCON 4

Consumer Sentiment Index (CSI):

A low CSI index is a general dissatisfaction with our current management of U.S. economic policies. This dissatisfaction will imply that something has to change. A high satisfaction rating suggests approval of the current policy management and implies market stability. Surveys of Consumers (umich.edu)

Consumer Sentiment Index as of 03/13/2022
- OptionsTradesByDamocles.com
Consumer Sentiment Index as of 03/13/2022

February’s preliminary’s shows a disappointing fall to new lows. This appears to come from high gas prices and disappointment in a prolonged Russian war with Ukraine (amongst other things).

Continued low CSI numbers are conformation of the general dissatisfaction with the government’s economic policies.

Being blind to all other indicators and just looking at this week’s CSI, I feel we should be extremely cautious.

Misery Index

With the copious amount of economic pressures throughout the nation this year (inflation, employment, interest rates, etc.), knowing what the Misery Index is and what direction the index is moving can cast a long shadow on Marketeer’s sentiment. Numbers are coming from the U.S. Bureau of Labor Statistics (bls.gov).

  • Inflation Rate: rose 0.8% in Feb ’22. Now up to 7.9% from a year ago.
  • Unemployment Rate: Febuary rate = 3.8%. Slight drop from 4.0% in January

Misery Index = 11.7% (7.9% + 3.8%). Slightly up from 11.5% last month.

CSI votes a dismal DEFCON 3

Market Indexes:

DOW (DJX) = 32,944 – down 2.0% from 33,615 last week. (4 weeks deviation: 684 up from 527 last week)
S&P 500 (SPX) = 4,204 – down 2.9% from 4,329 last week. (4 weeks deviation: 85.24 up from 60.49 last week)

The S&P 500 is a stock market index that tracks the 500 largest companies in the U.S. This index represents about 80% of all the capitalization for the country. The S&P is widely considered the best indicator of how all the U.S. markets are performing.

ThinkorSwim Chart: Daily S&P 500 Index - Four Months Trend (Updated 03/13/2022)
- OptionsTradesByDamocles.com
ThinkorSwim Chart: Daily S&P 500 Index – Four Months Trend (Updated 03/13/2022)

Market Thrashing

4 Weeks Thrashing of DJX = +/- 684 points or 2.1% of the market’s volume is a significant jump from 1.6% last week.
4 Weeks Thrashing of SPX = +/- 60.49 points or 1.4% of the market’s volume is flat from 1.4% last week.
(Market Thrashing above 1.0% might indicate indecision from the Marketeers.)

This past week was fairly brutal with the markets dropping around 2.5%. The talks of interest rates increase dragged the markets down and the question is “is the rates increase now already baked into the current market?”

  • The 4-month trend continues decisivly bearish
  • The 4-week trajectory affirms the trend as bearish
  • The 9-Day SMA and the 50-Day SMA continue running with the Bears
  • Current value of SPX fell well below the 9-Day SMA throughout the week.
  • Increased Thrashing suggests this coming week won’t be much better.

All the trajectories are still pointing lower.

Being blind to all other indicators, I’ll go with a DEFCON 3.

Market Index votes a DEFCON 3

My sentiment for this coming week:

Of the five indicators:

  • The ETS has systemic issues – optimistic DEFCON 3
  • The VIX is on the rise (now above 30%) – DEFCON 3
  • The P/C Ratio shows marginal good-shape – cautious DEFCON 4
  • The CSI shows a consumer base not excited about our economic future – DEFCON 3
  • The Market Indexs taking geopolitical hits – DEFCON 3

When combining rising volatility (VIX) and higher Put/Call ratio, with the market in correction and a dejected consumer base, the prospective for the next couple of weeks don’t look good.

I will not initiate a new Spread this week but focus only on rolling the one QQQ Spread (currently set to expire this Friday deep in ITM).

Trading Readiness Level for this week

DEFCON = 3

This week’s Rules:

With this week’s optimistic DEFCON 3, I’m going to maintain defensive vigilance.

I have one expiring QQQ Vertical Spread that is set to expire deep ITM this week. It is deep enough that there is (probably) no way to roll this and profit. I need to be prepared to make my first debit trade of the year.

Because I have rolled 6 Vertical Spreads, the availability of unallocated working capital is getting low (Options Buying Power). So I need to start rationing.

Entry Rules:

Since I will not be initiating a new Spread this week, these Entry Rules are mute.

  • Short Strike > 1SD below Current Underlying’s Price
  • If 4-month Trend Channel is bearish then -5 from Short Strike
  • If 2-week trajectory is bearish then another -5 from Short Strike
  • If 1-Week trajectory is bearish then another -5 from Short Strike
  • If POTM is still < 85%, lower Short Strike until > 85%
  • Max-risk < $2K (as the Markets see fit).
  • Open 1 15-wide or 1 20-wide Strike-Width Spread.
  • Spread term of 8-weeks or less.
Exit Rules:
  • Early close following this schedule:
    • 85% of max-gain if 4 or more weeks out
    • 90% of max-gain if 3 or more weeks out
    • 95% of max-gain if 2 or more weeks out
    • Let expire if less than 2 weeks out
  • Roll Spreads inside of 1 week of expiration if:
    • Short Strike is ITM
    • Short Strike < 0.5% and 1-week trajectory is bearish
    • Short Strike < 55% POTM and 1-week trajectory is bearish
  • Close rolled QQQs at $1 profit if it ever gets there.
    • Set QQQ 360p/320p exp. 3/25 GTC Closing Order Trade Trigeer to $0.99







Profit and Loss Statements

(As of 03/18/2022)

Note: It was bound to catch up with me. The year’s steep market correction has taken its first casualty this week. Rolling a deep ITM QQQ (see Vertical Spreads Opened This Week below) cost my trading account $805.05 this week and that has set me back to square one. If this is the only hit I take this year then I will be extremely lucky.

Cash Balance Sheet

Year
2022
Month
Mar
Week
#11
Beginning Account Balance$28,000.00$28,416.96$28,669.92
Deposits (Div. & Int.)$0.22$0.00$0.00
Withdraws (paycheck1)-$1,050.00-$0.00-$0.00
Premiums on Open$8,650.00$2251.00$1,996.00
Premiums on Close-7,710.00-$2,799.00-$2,799
Fees Paid (total)-$25.58$4.10-$2.06
Ending Account Balance$27,864.86$27,864.86$27,864.86
Total Gain/Loss-$135.14-$552.10-$805.06
ROR-1.9%-2.8%
ROC-0.5%
1 Paycheck = 22.5% of initial investment paid out monthly

Cash Flow Chart

YOD Vertical Credit Spreads Cash-Flow Chart - As of 03/18/2022 (Excel Chart)
- OptionsTradesByDamocles.com
YOD Vertical Credit Spreads Cash-Flow Chart – As of 03/18/2022 (Excel Chart)

(Note: the negative weekly results for weeks 4 and 8 were when I withdrew $525 from the Trading Account for my paycheck.)

My Performance vs. SPY

Hypothetically, instead of depositing $28,000 in my Options Trading Account, could I have done better if I bought $28,000 of the ETF/SPY instead?

Options Trading
Account
SPY
(Fictional)
Initial Investment
(As of Jan 4, 2021)
$28,000.00
(Cash)
$28,000.00
(58.9523 shares @ $474.96)
Funds Added$8,650.00
(Premiums)
0.22 shares
(Dividends Reinvested)
Funds Removed-$7,735.58
(Early Close & Fees)
$0
(Fractional Shares Sold)
Market Changes-$3,377.50
(Open Spreads’ Fair Market Value )
-$1,961.97
(Gain/Loss)
Ending Balance$25,537.36
(Mark-To-Market)
$26.038.03
(59.1706 shares * $440.05 CV)
ROI-8.8%-7.0%
As of 03/19/2022 10:54 AM

Note: The markets started 2022 terribly. But I still believe that it will end higher than it began. So if I can keep my at-risk Spreads safe until the markets start a slow trackback, then all this negative unrealized market value will reverse.







Schedule for this Week

Goals for this week: (03/14/2022 – 03/18/2022) (Week #11)

  • Document lessons learned or new thoughts
  • Open one or two wide-strike spread
  • Update Trading Log as trades occurs

Monday:

  • Determine/update this week’s market sentiment section
  • Calculate/record Put/Call Ratios for all stocks on the watch list
  • Review/tweak Trend-Channels for all stocks in the watch list
  • Set target expiration dates for all Options as follows:
    • Bull Credit Spreads: Mar 06, 2022 (6-8 weeks)
      Note: If there are no Options Chains published for the 8-week expiration, then use the next Options Chain down from 8-weeks (7-weeks, 6-weeks). Beyond 4-week expirations, only the monthly chains are available to trade.
  • Look up Ex-Dividend dates for positions in/approaching ITM (MarketWatch/Calendar)
  • Stage possible trades for all watch list stocks by 10:00 AM
  • NO TRADING BEFORE 10 AM. (Let the Market find its direction after the weekend.)
  • Watch one Webcast or take one online mini-course to be completed by Friday.

Tuesday – Thursday:

  • Review how yesterday’s staged trades moved. Adjust premiums to take advantage of movements.
  • Submit a couple of Spreads, but keep a close watch. If one is accepted, cancel the others (we want only one new active trade open in any one day).
  • Be mindful of Entry Rules.

Friday:

  • Review the total technical dollars at risk for this week. If significantly below $500, then submit additional spreads if prudent.
  • Update and post weekly journal (this blog) with any lessons learned or strategy changes.

This Week’s Trade Activity

(As of 03/18/2022)

Spread Count Summary:

Year
2022
Month
Mar
Week
#11
Vertical Bull Put Credit Spread1631
Vertical Bear Call Credit Spread000
Vertical Bull Put Debit Spread000
Vertical Bull Call Debit Spread000
Margin Interest000
Total1631

Current Dollars at Risk:

Year
2022
Month
Mar
Week
#11
Vertical Bull Put Credit Spread$18,218.$5,749.$2,004.
Vertical Bear Call Credit Spread$0.$0.$0.
Vertical Bull Put Debit Spread$0.$0.$0.
Vertical Bull Call Debit Spread$0.$0.$0.
Iron Condor$0.$0.$0.
Total Dollar Risk$18,218.$5,749.$2,004.
Max Risk Allowed$28,000.N/A$3,500.

Options Buying Power:

Unallocated dollars available to open new Vertical Credit Spreads:

Current Cash Balance$27,864.86
Set-Aside Dollars for Existing Spreads-$24,000
Cash Available for New Spreads$3,864.86
(Options Buying Power)







Vertical Spreads Opened This Week

(03/14/2022 – 03/18/2022)

-ITM- (Rolled) QQQ:345p/305p  – Open 03/15/22 – Expires 04/29/22 – Max Gain = $1,996.00 – Open Price = $319.40
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM= 21.1%, Headroom= +7.2%, Max Loss= $2,004, AROR= 807%

ThinkorSwim Chart: Vertical Bull Put Credit Spread – QQQ – Short: 345 Put – Long: 305 Put
- OptionsTradesByDamocles.com
ThinkorSwim Chart: Vertical Bull Put Credit Spread – QQQ – Short: 345 Put – Long: 305 Put

Entry Rules for Vertical Bull Put Credit Spreads:

  1. Current maximum dollars at risk < $28,000? Yes ($18,218)
  2. Max dollar at risk this week < $3,500? Yes ($2,004)
  3. Max time to have any dollars at risk < 8 weeks (<56 days)? Yes (45 days)
  4. Long-term trend (four months) bullish? No (see chart)
  5. Short-term trajectory of the underlying bullish? No (see chart)
  6. 2-week Thrashing < 1% & Bullish: No (2-week Thrashing = 2.9% / Bearish)
  7. Put/Call Ratio < 1, (or falling if it is > 1)? Yes (1.5 down from 1.8)
  8. Current price above 9-Day SMA?: No (see chart)
  9. 9-Day SMA above 50-Day SMA?: No (see chart)
  10. Short-strike > 1 SD below the current price? No (1SD=$285.19)
  11. Short-strikes Prob-OTM >= 85.0%? No (21.1%)
  12. Short-Strike price below the trend channel at expiration?: No (see chart)
  13. Strike Width minimum (>= 15)? Yes (40 strike width)

This rolled QQQ Spread is version 2.0.

The intent of this roll is not to profit, but to minimize a potentially big loss. If I allowed this Spread to expire this Friday (assuming the current value of QQQ ($319.40) remained flat, I would have a realized loss of ($350 Short – $319.40 cv * 100 shares)-$3,060. Rolling the QQQ:350p/310p to the above Spread cost me -$803. If QQQ can rebound at least 8% within the next 45 days, then I would have saved $2,257. If not, then I would have compounded my loss by another $803.

Although I was not able to get the new Short Strike below ITM, I did move the Short Strike down by 5 and the expiration date to 45 days out. But being 45 days out does not guarantee that this Short Strike will not be assigned, it just makes it slightly less likely.

Vertical Spreads Currently Cooking

(As of 03/18/2022)

Currently rolled Spreads: 5
Spreads currently ITM: 3

DIA:290p/270p  – Open 03/11/22 – Expires 04/29/22 – Max Gain = $113.00 – Open Price = $438.66
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM= 86.0%, Headroom= -13.1%, Max Loss= $1,887, AROR= 44.2%
Now: Prob. OTM= 92.3%, Headroom=-15.5%

SPY:380p/360p  – Open 03/03/22 – Expires 04/22/22 – Max Gain = $142.00 – Open Price = $438.66
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM=84.7%, Headroom=-13.5%, Max Loss=$1,858, AROR=55.4%
Now: Prob. OTM= 90.5%, Headroom=-13.3%

(Rolled) SPY:410p/380p  – Open 02/23/22 – Expires 04/14/22 – Max Gain = $509.00 – Open Price = $430.68
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM= 65.5%, Headroom= -4.8%, Max Loss=$2,491.00, AROR=148.9%
Now: Prob. OTM= 79.2%, Headroom=-6.4%

(Rolled) DIA:320p/290p  – Open 02/24/22 – Expires 04/08/22 – Max Gain = $660.00 – Open Price = $2,340.00
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM= 55.6%, Headroom= -2.0%, Max Loss=$2,491.00, AROR=239.1%
Now: Prob. OTM= 85.0%, Headroom=-6.8%

-ITM- (Rolled) QQQ:350p/310p  – Open 02/14/22 – Expires 04/01/22 – Max Gain = $1,059.00 – Open Price = $349.53
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM=46.8%, Headroom=+0.2%, Max Loss=$2,941.00, AROR=285.4%
Now: Prob. OTM=38.6%, Headroom=+1.4%

-ITM- (Rolled) QQQ:360p/320p  – Open 02/08/22 – Expires 03/25/22 – Max Gain = $1,178.00 – Open Price = $353.65
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM=40.4%, Headroom=+1.8%, Max Loss=$2,822.00, AROR=338.3%
Now: Prob. OTM=15.3%, Headroom=+4.2%

SPY:390p/370p  – Open 02/04/22 – Expires 03/25/22 – Max Gain = $125.00 – Open Price = $446.66
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM=85.9%, Headroom-12.7%, Max Loss=$1,875, AROR=49.3%
Now: Prob. OTM= 98.0%, Headroom=-11.2%







Vertical Spreads Closed This Week

(As of 03/18/2022)

-ITM-(Rolled) QQQ:350p/310p  – Open 01/25/22 – Expires 03/18/22 – Max Gain = $1,310.00 – Open Price = $442.47
(Vertical Bull Put Credit Spread)
At Open: Prob. OTM=40.6%, Headroom= +2.1%, Max Loss=$2,690, AROR=341.6%
At Close: Prob. OTM=0.7%, Head Room=+7.3%, AROR= -412.9%

Cost to open: $13.10 premium collected * 100 shares = $1,310.00
Cost to close: $27.99 premium paid * 100 shares = -$2,799.00 (rolled)
Net Profit = $1,310.00 to open – $2,799.00 to close – $2.00 fees = -$1,491.00
AROR = (-$1,491/ 49 days in play) *365 / $2,690 = -412.9%

This Spread is being rolled for the second time.

The actual profit/loss on this effort (-$1,491.00 + $166.00 premiums collected prior to roll) = -$1,325.00
(See the Commentary above on how I calculated the $166 premiums collected)
(Since this was a roll (now twice) the effort continues…)

Conclusion

Can selling options for income be considered a Home Business? Can I make money at home by selling Vertical Bull Put Credit Options Spreads? These are questions that I am trying to answer for myself.

Three years ago, I set out on a task to see if I could make a retirement income from home by trading Stock Options. I began with NO knowledge of Options mechanics and only $8,000 to risk. And because I learn best when I write things down, I have documented every step of the way (every bonehead mistake, process epiphanies, interconnecting events, externalities, and so on).

This blog is my Options Trading Journal. I will record my weekly Option Contracts buys and sells in hopes of gaining experience.

Experience is the ability to recognize that
I’m about to make the same mistake again.

– Damocles

Disclaimer

Even though I have tried to make it clear that this blog is my personal trading journal, it has been suggested by others that I, nevertheless, include a general disclaimer. So here goes…

“This blog and the information contained herein is not intended to be a source of advice or analysis concerning the material presented. The information and/or documents contained in the blog do not constitute investment advice.”







OptionTradesByDamocles.com
OptionsTradesByDamocles.com