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Short the Futures

I shorted the SPX futures at 1097.50 in after hours with a stop loss at 1102.50. Max risk is $250 ($50 per point). It just occured to me that the $250 risk I incurred on the SPY 106/105 bear put spread I bought a few weeks ago could have also been played by shorting the futures instead. The difference would have been in the trade off. With the options I had a defined risk/reward of $250 risk and $750 reward. With the futures I could set my stop loss at the same risk of $250, but the advantage would have been I could exit the futures at any time for whatever strike price I decided to exit at, but the options spread as I found out was only about 35% profitable even though the SPX had run down through my naked price on the spread at 1050. So obviously frustrating to see your target hit and only have 35% of the gain available to you because of leftover time decay. Futures have no such issue. The trade off here is that with futures you can be whipsawed out right away, with the option spread I had time on my side should the trade initially move against you.

Had I had my own personal trade filter set up that I'm still working on, it's possible that during the portion where I analyze it from the opposite or alternative point of view that I would have decided to use futures instead of options. I will never know so I won't cry over it. I learned something and the pain of a $250 loss instead of a $250 gain is enough to remember.

For Thursday, I am short SLV puts at $16 and will look to close those out in the morning as it's about a .05 gain right now, but there is a gap on the chart that I don't want to see get filled as its lower than where we are currently at. I am long MO calls that have lost half their value. I am either going to exercise the calls and get long, or probably just sell the calls tomorrow at intrinsic value and then buy the stock. I will have a MTM loss and plan to keep this position long-term as an investment to sell covered calls and receive dividend income. I have two positions that will expire worthless and one more (VZ), that I will probably take possession of. I'll update after expiration on Friday.

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