Had some nice trades on 5230 strike SPX puts this morning after 5235 acted as resistance and we felt stalled out on the upside. XLF started to turn lower, tech was fading and VIX was rising. The pillars of the market idea worked well for that. I cashed out after the first hour and had to travel so I was off desk for the rest of the day and missed the rally back into the close.
I’ve been hearing about this massive equity rebalance sell into the end of the quarter (10s of billions worth) which is tomorrow as far as market days go. If that is real then tomorrow could be a perfect setup for puts on SPX again at some point. Especially after today’s end-of-day rally cleared out most of the put positioning which means hedges are gone.
SO if there is a huge sell tomorrow and the volume all around is low from the holiday weekend and there are almost no hedges in place then we could have a day where 15x-30x puts can happen. I won’t force it but the setup is there. The trick is not to get stopped out a bunch of times before it happens and miss it. If trying it, using small size is better with a wider tolerance for volatility.
It’s also worth mentioning that SPX/SPY 0DTE is not an everyday trade to make and shouldn’t be done with money you can’t easily risk. This week happens to be good for SPX trades.
Thanks Chris. Your scans and insight add tremendous value to IG. Very much appreciated! I’ve recently taken an interest in options and am familiar with a few strategies, Greeks etc….but was wondering if you mentor as I’d like to learn more re, options. Please let me know and DM me in the room if so. Regards… Scoot