Thursday, October 16, 2008

Buy SPY (sell puts)

Buy SPY via selling the Oct 83 puts (11 points out)

I am not brave enough to buy when the gap on SPY is filled at 89. Instead, I decide to wait until it is near closing time. I choose the strike price below the old low. I place a limit order and it slips away as the rally continues. I adjust the limit lower, and get filled.

It is another wild, wild day in the markets with more huge swings. I was tempted to go long on the early morning rally, but the fast moving market discourages me. I wrote about going long at SPY 89, but again the fast moving market discourages me.

There is always a chance that I get pummeled again. However, each daily decline has been less than 10% for one day in the U.S. It would take more 10% that for these puts to come into the money.

Long SPY expiring tomorrow

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