Hello Investors,
Today we added a final 1×2 put spread to our existing SPY long put position. The hedge hasn’t panned out but that also means that portfolios have likely gone higher in value. So, a bit of a good news/bad news situation as is often the case with hedges. This addition allows us to use that insurance into Dec 19th expiration at better levels. Ideally, as it is positioned, the SPY will pullback toward the 668 strike price.
For those that already own the SPY Dec 19th put, we have added the following.
Buy to open: SPY Dec 19th (monthly) 685.00 strike put (ratio of 1)
Sell to open: SPY Dec 19th (monthly) 668.00 strike put (ratio of 2)
Debit: 2.21
Max risk = 2.21 or $221.00 per spread
Max reward = 14.79 or $1,479.00 per spread
Have a great week!