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SPY put adjusted into Diagonal Put Spread

I decided to adjust my original SPY put trade into a diagonal put spread. That will bring some income and reduce the original put cost.

I have:

1 SPY Dec17 2011 124 strike put

and I adjusted this trade into a diagonal put spread, so the final holding will be:

1 SPY Dec17 2011 124 strike put
-1 SPY Nov25 (weekly) 2011 118 put

The ideal landing spot will be slightly above $118 per share next week, when weeklies expire. In that case I will keep the whole credit I received and I can repeat this again the following week or liquidate the entire position for max. profit, since my longer term puts will gain a lot as well and short term puts will expire worthless.

Happy Trading!





One response to “SPY put adjusted into Diagonal Put Spread”

  1. Quido says:

    Thanks for the strategies presented. Can you provide an update on this spread?

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