After a run-up yesterday to near the 500 level, SPY spent most of Wednesday afternoon trading in a narrow range between 497 and just under 500. Today saw a continuation of that trading range, as SPY opened flat, and quickly ran back up to 498.35. SPY then traded slightly down into midday, falling to 497.26. The afternoon was spent trying to make it back to the 498.50 level, which it did just before the end of trading before falling back and closing at 498.32.
The Delta Price chart illustrates just how narrow the trading was today, with SPY trading within a half a point either side of unchanged.
Thursday's Spread Combination:
Long Bull Call Spread
Buy Open Feb 08 '24 499 Call @ $0.78
Sell Open Feb 08 '24 500Call @ $0.44
Cost = $0.78 - $0.44 = $0.34
Long Bear Put Spread
Buy Open Feb 08 '24 497 Put @ $0.64
Sell Open Feb 08 '24 496 Put @ $0.37
Cost = $0.64 - $0.37 = $0.27
Total Cost = $0.34 + $0.27 = $0.61
On the 15 Minute Chart we can see the opening downside bias, with the SPY RSI(5) falling below 30 at 11:15 with the MACD momentum at a low. with SPY also trading at the low end of the trading range, it was a good sell area. The Put Spread was closed out at $0.30
SPY then traded with an upward bias, with the RSI(5) and MACD momentum both increasing. However, the upward bias did not amount to much, and 3:15 the RSI(5) rose above 70, and the Call Spread was closed out at $0.10.
Today we closed out our Spreads for a total of $0.30 + $0.10 = $0.40. Our cost basis was $0.61, and today we had a loss of $0.21.
Friday's Spread Combination:
Long Bull Call Spread
Buy Open Feb 09 '24 499 Call @ $0.86
Sell Open Feb 09 '24 500 Call @ $0.50
Cost = $0.86 - $0.50 = $0.36
Long Bear Put Spread
Buy Open Feb 09 '24 498 Put @ $0.96
Sell Open Feb 09 '24 497 Put @ $0.59
Cost = $0.96 - $0.59 = $0.37
Total Cost = $0.36 + $0.37 = $0.73
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