Volatile SPY - Week in review (Apr 1 - Apr 5)
Market had a volatile week.
Down, and up, and back down again. Finished a little bit down.
Came close to having to cut some positions for a loss, but ended up not doing anything haha.
Just a couple new positions this week:
Opened #
| Ticker | Action | Type | Date | Expiry | Sell Strike | Buy Strike | Premium | Qty | Fee | Net |
|---|---|---|---|---|---|---|---|---|---|---|
| SPY | open | BPS | 2024-04-02 | 2024-04-12 | 510 | 500 | 1.03 | 2 | 2.8 | 203.2 |
| SPY | open | BPS | 2024-04-03 | 2024-04-12 | 509 | 499 | 0.6 | 2 | 2.8 | 117.2 |
| BIDU | open | BCS | 2024-04-05 | 2024-05-17 | 120 | 125 | 0.85 | 2 | 1.11 | 168.89 |
As a result, I entered my weekly SPY position at the wrong delta (i.e. 0.25 instead of 0.15), because I had already placed the order before the market opened.
Luckily, I ended up closing it the next day for a small profit, then reopening it again at the correct delta. By then, the market was up a bit, so I ended up at a pricepoint that was only $1 less than original (i.e. 509 vs 510)
Lots of work for nothing 😅
Closed / Expired: #
| Ticker | Action | Type | Date | Expiry | Sell Strike | Buy Strike | Premium | Qty | Fee | Net | Profit/Loss |
|---|---|---|---|---|---|---|---|---|---|---|---|
| SPY | open | BPS | 2024-03-26 | 2024-04-05 | 511 | 502 | 0.59 | 2 | 2.79 | 115.21 | $115.21 |
| SPY | expired | BPS | 2024-04-05 | 2024-04-05 | 502 | 511 | 0 | 2 | 0 | 0 | |
| SPY | open | BPS | 2024-04-02 | 2024-04-12 | 510 | 500 | 1.03 | 2 | 2.8 | 203.2 | $56.40 |
| SPY | close | BPS | 2024-04-03 | 2024-04-12 | 500 | 510 | -0.72 | 2 | 2.8 | -146.8 |
- Closed Net Profits/Loss: $171.61
Just SPY.
Notes and Lessons #
Market is at its most volatile level in the past few months.
Took a bearish position in BIDU to hedge all my bullish positions. BIDU has been trending down slowly for the past 9 months, so just going with the trend.
MCD conundrum #
I noticed one of my open April 275/265 bull put spread in MCD is probably going to close for a loss later this month.
This position was taken as part of my long term strategy. In my backtest, it never once lost money on the 15/10 delta bull put spread over the past 5 years. Unfortuantely, it seems like it's going to break that streak.
Shows you how reliable backtests are.
I'm thinking if I should just take the loss, or roll it out to a later data.
I can roll it out at the same strike prices, but receive no premium. Or, I can roll it out and increase the spread width at the same time to like 275/255 or something. I would receive small premium, but also be doubling the risk.
Not sure what the smarter option is. I think I will probably roll it, because I dont feel like eating the loss right now. In long term, I think MCD will still continue uptrending, unless something else catostrophic happens.
Will this decision come back to bite me in the ass? Possibly.