Trade 1 (11:45:23 am, PT)
sell -4 Sept 17, 2018 2890 puts at $0.40
buy +4 Sept 17, 2018 2875 puts at $0.05 (cheap wing)
Why did I place this trade?
It was late in the day and SPX appeared to stabilize around 2895.
Comments:
At 12:54 pm (PT), SPX was trading around 2886, so my short put (2890) was in-the-money (ITM) with only 4 minutes remaining. It was time to ROLL my short puts to the next cycle (9/19/2018 expiration).
Simply buying back the short puts without rolling or allowing them to expire ITM would have resulted in a loss of over $1000.
Trade 2 (12:54:55 pm, PT) ← ROLL
buy to close +4 Sept 17, 2018 2890 puts at $3.46
sell to open -4 Sept 19, 2018 2885 puts at $9.21
The roll gave me a new credit of $5.75
Then I had to buy (to open) 4 new wings with a Sept 19, 2018 expiration:
+4 Sept 19, 2018 2800 puts at $0.95 (debit)
Tuesday, 9/18/2018 (7:43:24 am, PT)
my preset buy-to-close order filled at $2.00
I'm going to leave open the 4 long puts ("wings") so I can use them again on 9/19/2018 (for my next vertical put spread). Most likely they will expire worthless on 9/19/2018.
PROFIT: $1260 (one day)
Learn to SELL PUT OPTIONS HERE!
