Trade Alert 12/19/2025

We always manage spreads around expiration in the same manner. If we are at the long strike, we try to exit as early as possible. If we are near the short strike, or in the middle of the spread, we try to stay in the trade all the way toward the expiration. Our SPY 1×2 put spread position is in the middle of the spread. Unfortunately it has been moving higher today where a move down would have been more ideal. However, we still have some value in the 1×2 spread and a push lower in the stock is not out of the question. The management of this position will be as follows: Assuming the stock is well above the 668 strike, we can simply let those puts expire worthless. If SPY falls toward that strike, then we will close them as well. We absolutely will need to exit (sell) our 685.00 strike puts today before the close, here is the game plan. Sell to close: SPY Dec 19th (monthly) 685.00 strike put Credit: as much as possible (we will close around 15 minutes before the close of trading today roughly 3:45 pm ET) Rather than have a “naked” option, one could also “buy to close” the 2 contracts at 668 strike for 0.01 cost. Although they are very likely to expire worthless on their own.