Short Call spread in SPY

This morning I put on a short 150/160 call spread on SPY. We are approaching the highs from September of 2012 and I am not so sure we will be able to breakout to new highs. One thing I would like to point out is the fact that I went all the way to December expiration for this trade. I collected $4.06 for the trade. There are two reasons I did this. These days balancing trading with all my other ventures I don't want to feel compelled to be glued to the trading screen. When I first started I felt like I had to watch every tick in the market. Now I have periods of super active trading, but for the most part I pick trades I really like and can set and forget.

And it doesn't matter whether I check daily, weekly, or every few weeks. Of course I can set alerts to let me know if I need to check in.

The second reason is I have a few long covered call positions that would benefit on the market going up. But I just want a little more downside protection in the event the market does indeed have a pull back from these highs.

I even acknowledge the fact that at some point this year the SPY could be testing 2008 highs near $157. But in reality I doubt we finish the years at the highs.

At the end of the day I like the risk/reward of this trade in respect to the other positions that I currently have on.

Time to set it and forget it!

Good Luck Trading!

Comments

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