I'm changing things up a little this week. This is mainly because the NASDAQ had a big drop this week, and I don't want to hold onto the open Put Spread too long. Last week I made a trade for a $205(1.02%) gain on a $20K account when it expires at the end of the day today. If I had been invested in a NASDAQ ETF, I would have had a loss of about 5% at the mid-day on Friday.
This week's trade of the week is a Put Credit Spread but I'm rolling last weeks trade rather than letting it expire worthless. To do this, I have to close last week's trade when I open the new trade this week. To close last weeks trade, I'll sell to close the 16 Sep 2022 $2,270 Put and buy the 16 Sep 2022 $2,320 Put. This part of the trade will cost $860. I'll sell 3 PUT options on NQX with a strike price of $2,190 and an expiration of 23 Sep. At the same time, I'll buy 3 PUT options on NQX with a strike price of $2,140 and an expiration date of 23 Sep. The second part of this trade will give me a credit of $1,035. This overall trade has a maximum gain of about $175 as long as NQX closes above $2,190 on Friday, 23 Sep, 2022. I made this trade in my account that has a cash balance of $20,000. Due to the addition of the third credit spread ending next week, I'm risking $15,000 of the available $20,000 to make this trade. It's still unlikely that the NQX will fall by 7% this week, so I'm still comfortable with the risk.
The trade discussed above is not a recommendation but is merely an account of what I may have executed in the past.
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