We have had a few weeks of sideways trading and as a result short-term extremes have been nonexistent. Yes, there have been a few potential short-term set-ups, but they never truly entered into a short-term extreme. GLD was certainly close, but the trade never came to fruition.
As we all know the strategy enters periods of stagnant trading. Again, this is a long-term approach to options trading and is to be expected. Boring, maybe to the aggressive crowd out there. But, I am more interested in the profitable trades. Trades that I am confident in due to the short-term extremes that have entered the stock market - high-probability trades. I think the win ratio and returns of my options strategy speak for themselves.
Ultimately, this whole endeavor is about creating and teaching you a way to make money using stock options. I hope you can join me for the ride.
Theta Driver Options Strategy
The Russell 2000 (NYSEARCA:IWM) is four days into the August options expiration cycle and the high-beta index is only $0.37 higher. The credit spread that I added over 20 days ago, is worth $.45, or $.11 higher than the price I sold for the IWM credit spread. I am still quite comfortable with trade and will continue to allow the statistics to play out. Time decay should really start to set in over the next few weeks.
I will be issuing another credit spread trade over the next two days so stay tuned. I plan on adding a position in one of the hottest precious metals.
Here it is: The first trade in my new Credit Spread Options Strategy. I will continue to go over the trade in full detail in the Weekly Options Report and here on the blog.
Market Mumbo Jumbo
SPY remains range-bound.
Nothing new here: Not much has changed over the past few weeks - range-bound trading persists. It appears we could see the markets move sideways for a few more months. Are the summer doldrums already upon us? How long can SPY stay in this range of roughly $126 to $137? The question is, while I continue trading extremes in the HPMR strategy , how can I take advantage of the range bound movement at the same time. You guessed it – a credit spread.
Options Strategy Indicator – Overbought / Oversold Extremes
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.