Options Trading Newsletter - Right Timing? Issue #144 Options Today - Neutral on SPY
Right Timing? Options Today - Neutral on SPY
Right Timing?
"Is there such a thing as 'Right Timing'?" This question often surfaces in discussions about success, usually coupled with the proverb, "Right Place, Right Time." Interestingly, we mostly hear this in retrospection from those who have already achieved success. But is this concept of timing as straightforward as it seems?
The paradox of 'Right Timing' is that it's only recognizable in hindsight. Consider the stock market: selecting the perfect entry point for a trade, reaping profits when the stock bottoms out and bounces higher (buy low sell high) - this is often perceived as 'Right Timing.' However, had you refrained from buying at the low, would you still claim to have had impeccable timing? Likely not.
This brings us to a pivotal realization: 'Right Timing' may not exist in the way we traditionally understand it. Instead, it's about the decisions and actions we take at any given moment and the results they yield. As we approach the end of the year, this understanding becomes particularly significant.
Many of us wait for the perfect moment to act on our goals. If you've been holding back throughout 2023, let me tell you, there's no better time to start than now. The notion of waiting for a New Year's resolution is all too familiar - "Let's wait for 2024," we say. But from personal experience, I've learned that postponing action often leads to missed opportunities. I've made countless resolutions over the years, yet delayed taking steps towards goals I should have pursued long ago.
The point I am trying to bring is, there's no 'right' time to start anything. If there's something you need to do, the best time is now. Starting slowly is perfectly fine; what matters is the consistent action we take day by day. Success isn't achieved overnight. It's the result of small, persistent steps taken towards our goals.
So, what are you waiting for? Embrace the moment and make your move.
"Shoot for the moon. Even if you miss, you'll land among the stars."
SPX (4719)
The Fed just poured fuel to the market. Not that it will crash and burn but some additional fuel to take it higher. Last Wednesday, they basically reaffirmed the end of the hike cycle and that took the market up higher. There is likelihood the rally will touch the all time high as 4818 is less than a 100 points up.
Whether it will sustain above this level into next year is obviously another story. I would say there has been a lot of chasing by laggard institutional funds while those who had made it for 2023 had already closed their books and left for the ski resorts or tropical island.
I personally would just dip in for quickies and stay neutral for now. There’s really no point to make a bit more and risk the achievement for the year and better to be satisfied for now.
This year has been stellar performance for many of the stocks on S&P. But remember that a bad year means overperformance for next year and a good year may be underperformance for next year. Hopefully, before year end, we will take sometime to cover more for what stocks to expect for 2024, its going to be a tough pick.
Recall our 2023 stock picks? It worked well for most of it…
NDX (16623)
There’s no doubt that the all time high of 16764 will be breached before Christmas. Its only few points above, so why hold back right?
Trading range for the week is between 17050 to 16250.
HANG SENG INDEX (16792)
HSI support at 16000 held well. HSI should rebound higher back above 17000 soon, so we should take any opportunity of retracement to buy in.
The lower support now at 16000 and resistance at 17200.
OPTIONS TODAY - NEUTRAL ON SPY
SPY is currently trading at around 470.
The expected move to 31 Jan 24 expiry is around 14.39, which means the expected move is between 455.61/484.39.
If we structure an neutral trade using Iron Condor, the short strikes would be placed at 490 for the short call and 455 for the short put. With 5 width each side the long call at 495 and the long put at 450. That will give a credit of around $1.20 with a max loss of $3.80.
455 is at the support level, where you see the March and July resistance, which would likely turn support. On the upper side, getting into 490 level, would mean the rally to likely continue from now, bringing it to a more overbought level which may give a breather at one point.
We extend it a bit more to 31 January to get to bigger expected move for more room to move.
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Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options: https://www.theocc.com/components/docs/riskstoc.pdf
MYstyework is an Online Financial Literacy Educator and materials provided is solely by MYstylework and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. MYstylework, through its contents, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. MYstylework is not in the business of transacting securities trades or an investment adviser.
Our SYP Iron Condor expired within the price band. Those who have kept till expiry would have the full profit. We exited earlier before FOMC as we needed to sleep.... can't wait for any surprises. 64% premium earned.