We had previously added a 1×2 put spread to work in combination with our long put in SPY. It expired earlier this week for a small loss of the debit paid. Today we have replaced it by adding another 1×2 put spread. This has a small credit but the majority of profit would come if SPY continues to decline.
Buy to open: SPY Nov 21st (monthly) 655.00 strike put (ratio of 1)
Sell to open: SPY Nov 21st (monthly) 640.00 strike put (ratio of 2)
Credit: 0.13
Probable reward = 0.13 or $13.00 per spread
Max reward = 15.13 or $1,513.00 per spread
Max risk is the stock falls below the breakeven of 624.87/share. Since we own the December 650 put working with this trade and it would go up in value in that scenario, it is less of a risk to us.