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SPY overall strategy

(2008-11-06 19:54:42) 下一个
(1) Don't fight against the trend. The trend is down, So only short, no long
(2) The trade for short is to sell call spread, slightly ($2-3) in the money, $10 apart and $5 in value. this makes risk/reward 1:1 and also $2-$3 upside protection.
(3) Use 1/3 - 1/2 to initiate the first transaction. If the transaction is not correct after that, continue to find higher price to short at least once. If goes the correct direction, add more gradually.
(4) Close the position when the target reaches and the price strengthens. Don't keep it untill expiry date when O/E is a few weeks away. Learned a good lesson about it.
(5) In last 2 weeks, seek to keep some good position until O/E day for good profit. for positions aimed at O/E day, they have to be safer than normal spreads.
(6) $500 bet on O/E day,  when price establishes drop.
(7) When opportunity arises where Iron Condor is free trade, consider to form one for potential higher profit.

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