Aug 9, 2024 Update

Hey traders! This week went quite well. On Tuesday, market opened 4% below Monday’s close meaning I received quite a bit of profits on my call verticals, so I closed the 2 that were expiring next week since I was worried that SPX would go up from there (which it did 😅). My remaining call spread expired OTM so I was able to collect full profit there.

I opened some Broken Wing Butterfly spreads this week. I opened the put ones because I am overall bullish on SPX for the next month. This is a spread that has a small trap before going into loss so even if it starts losing money I should be able to close the position before it goes very negative. I will most likely be continuing with these spreads since I like their risk profile more than the vertical spreads.

The only downside to these spreads is that it takes some managing, especially if the market goes against the spread, which is why I’ve kept my risk quite low while I learn and practice how to do that.

These spreads do contain a put debit spread in them which I can sometimes keep as downside protection by closing the other parts of the spread, however since it’s short term (only 21 DTE), it wouldn’t do much as a hedge.

I will most likely be trading these on XSP moving forward as XSP is a ticker that is always one tenth of SPX, so I’ll be able to more finely control how much I risk while still getting the tax advantage.