Buy SPY via selling May 96 puts. This gets me to about delta neutral after being slightly short. The position is four-headed, but the bottom line is close to neutral, benefiting from time decay.
The stock market was set up for a decline, but doesn't go down. Yes, it is extended to the upside, but the odds of a significant short term decline of 10% or more, seem slim.
For the 96 strike to come into play, would be about a 19% decline. It is difficult to see that. 10% stock market declines are common. However, 10% in a single month is an exceptionally bad month. Two -10% months in a row is the sign of a major bear market.
Long GLD, TLT
delta neutral SPY
No comments:
Post a Comment