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2022 SPX put credit spreads trading review – week 03

What a week! And a month! SPX got hammered though not as much as Nasdaq. We are in a stage where investors are dumping everything now. Even good quality stocks. I guess margin calls are hitting them hard so they have to liquidate even good holdings in their portfolios. Last two weeks, I was rolling, adjusting, and liquidating some positions to stay afloat. Now it is paying off.

I also reversed our SPX strategy to selling calls but mostly staying away from the market. It is extremely difficult to short the market (any market) and we are down 9% so far. Yes, we can go down 20% from here, but we may also very well be bottoming and the rally can be extremely hard. You can get caught short with pants down, you reverse the trade, and the rally fails. You will get ripped twice. For this reason, I prefer staying out.

Yet, I opened another long-term trade that was still favorable. We finished the week up +3.74% while SPX lost -5.68%. Our account is still up 46.25% since the beginning of this program. If the selling continues, I might start seeing some troubles too, though. Those long-term trades are still safely beyond 1 SD but if the market keeps falling at this rate, it may not be safe anymore.
 

Initial trade set ups

 

For my SPX strategy, I dedicated a $3,600 initial amount that will be used to trade SPX PCS strategy per week. If this amount is depleted, I will evaluate the strategy to determine whether to continue or change it. If I grow this amount, I will scale up the trading.
 

WHAT WILL WE TRADE?    
DAY DTE TYPE
MONDAY 7 DTE Put Credit Spread
TUESDAY 30 DTE Put Credit Spread
WEDNESDAY 7 DTE Put Credit Spread
FRIDAY 60 DTE Put Credit Spread
EVERY MONTH 120 DTE Put Debit Spread – HEDGE

 

Last week trading

 

DAY SIGNAL TYPE TRADE STATUS
MONDAY Negative No new trade
TUESDAY Negative No new trade
WEDNESDAY Negative New 7 DTE Call credit spread trade opened
credit: $95
Exp: Jan26
FRIDAY Positive New 60 DTE trade opened
credit: $95
Exp: Mar18 (pm)
EVERY MONTH No new trade opened

 

On Monday, our entry signal was negative and we stayed away from the market.

On Tuesday, our entry signal was negative and we stayed away from the market.

On Wednesday, our entry signal was negative however, we opened a credit call spread.

On Friday, the signal for the 60 DTE trade was mixed/positive and we opened a new 60 DTE credit spread. I got confused and instead of on Friday, I opened the trade on Thursday. If opened on Friday, I could get a better position. But mistakes happen.

We didn’t open any new 120 DTE debit hedging trade this week. Since the market outlook is very negative and we are in backwardation, I might be opening a new additional hedge trade on Monday.
 

Here are our delayed open trades:
 

SPX PCS delayed trades week 3
SPX PCS delayed trades
 

The trades are two weeks delayed. If you want to see the most recent trades or receive alerts, subscribe to our SPX alerts.
 

Overall, the strategy resulted in a $190.00 gain last week. Note that the gain might be unrealized as some or all trades may be still open.
 

Initial account value (since inception: 12/07/2021): $3,600.00
Last week beginning value: $5,075.00
Last week ending value: $5,265.00 (+46.25%)
The highest capital requirements to trade this strategy: $8,975
Unrealized Gain: $390 (+4.53%)
Realized Gain: $1,275 (+14.81%)
Total Gain: $1,665 (+19.34%)

 

SPX PCS account value
SPX PCS account value
 
Our SPX net-liq increased a bit last week but I consider it a good result since the market is volatile and non-trending, well, it is trending but the trend is choppy and weak.
 

SPX PCS account vs SPX
SPX PCS account vs SPX index net liq
 
However, comparing the account with SPX net-liq, we are still outperforming this horrible market.
 

SPX PCS account vs SPX
SPX PCS account vs SPX index
 

If the market continues being this choppy or even going down as fast as it has so far, I expect slower or no growth, because I will be out of the market.

If you want to receive trade alerts whenever we open a new SPX put credit spread or a hedge trade, you can subscribe to our service:

 

SUBSCRIBE HERE

 

Note, if you wish to subscribe to multiple levels, you can do so by subscribing to one level only and then send us an email that you want to be added to other levels too.

Also, if you like this report, hit the like button so I know there is enough audience wanting to see this type of report. If you have any questions or want to see anything else about my SPX trading, do not hesitate to contact me or write a comment in the comments section. Thank you!

 
 





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