Aug 30, 2024 Update

This has been quite a choppy week. SPX reached its recent high but doesn’t seem to be moving either up or down. While that would normally be great, I work with shorter term spreads now so I’m worried about even small pullbacks. I think the market consolidation will probably result in a pullback but my strikes are below the previous line of resistance so I should be fine even if I have short term losses. If the price does end up breaking past this resistance line though, I’ll be able to aggressively move my strikes up and collect a lot of premium which should be good.

Because of the premiums and profits, my buying power usage is down to 75% which I don’t mind keeping at. Next week, or the week after, I will have enough funds to open another spread while staying under 80%; maybe I will find something with a negative delta in order to delta hedge, or something that is very safe.

Trade by Trade:

Rolls 1, 3, 4: These were all rolls that performed exactly as expected. I rolled my spread back down to 0.12 delta and collected a good credit for it. The Wednesday roll was only $50 because of the choppy market the days before. The Monday roll would have also been cheaper but I did it at 8DTE because the market next Monday is closed for Labor Day.

Roll 2: SPX moved down a lot on Tuesday so I did a defensive roll to get a better strike. In hindsight this was unnecessary but I was worried about Wednesday also being a red day and my spread going ITM.

Position 5: During this week, the rolls totaled $445 in premium even though the market was choppy. This is great but the $445 is still unrealized. It will take another month or so for the total premium to reach $4k (since the spread is 40 wide) where all subsequent premiums from rolls will just be cash in hand. In any case, I’m happy with this strategy and it’s giving me a good return without too much work on my part.

Position 6: I didn’t manage the butterfly at all this week. It’s low delta prevents it from getting too affected by the day to day changes in price. My profit target for this trade is $272 or next Friday when I will close this position to open another one.