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2022 SPX put credit spreads trading review – week 05

The market is truly treacherous as some people out there say. The SPX went down hard just to be bought back the same day and erased all previous losses. Trading in this environment is extremely difficult. That’s why I am happy to have my strategy trading SPX credit spreads. It is based on combining several indicators and oscillators such as moving averages, Bollinger bands, and relative strengths of several non-correlated sectors on the different time frames from daily to monthly frames. It doesn’t provide buy signals or sell signals. It is not a magic trading formula. It still needs that damn human factor to be applied (which is the weakest link in the chain). The strategy gives me a clear view of the trend. Is it a strong trend, wacky, shaky, or a raging bull? Last week I saw a strong trend from the lows but then it weakened. While others panicked, I saw it still tradeable. Weak, but OK to trade.

Our SPX strategy is designed to stay away from the market if it is not trending and the signals are negative. Last week was good for a few days to take our trades. But the signals are getting weak and if this continues, on Monday, we may be negative again and thus stay away. Or reverse to call spreads. Or instead of a 40 delta trade, we take 14 delta trade. Or 5 delta trade…

Our SPX PCS strategy finished the week up +10.08% while SPX was up only +1.55%. Our overall account is up +66.86% since the beginning of this program.
 

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 Positive New 7 DTE trade opened
credit: $310
Exp: Feb7
TUESDAY Positive New 30 DTE trade opened
credit: $135
Exp: Mar31
WEDNESDAY Positive New 7 DTE Call credit spread trade opened
credit: $310
Exp: Feb9
FRIDAY Positive New 60 DTE trade opened
credit: $95
Exp: Apr14
EVERY MONTH New 120 DTE hedge opened
debit: $95
Exp: Jun17

 

On Monday, our entry signal was positive and we opened a new trade collecting $310 credit. The trade is in a good shape so far and unless the market sells off again on Monday, this trade should expire worthless for a full profit.
 

On Tuesday, our entry signal was positive and we opened a new trade. However, I was cautious expecting a pull back from the rally (which happened later during the week) so I decided to go conservative, and instead of delta 45, I used delta 20. We collected a $135 credit for this trade. So far the trade is in good shape and working.

On Wednesday, our entry signal was positive, and we opened a new put credit spread. Unfortunately, when the stock dropped on Thursday, the trade got in the money. We will wait for the market to recover and if not, we will roll the trade away (it will be a debit trade though).

On Friday, the signal for the 60 DTE trade was positive and we opened a new 60 DTE credit spread.

We opened a new 120 DTE debit hedging trade this week.
 

Here are our delayed open trades:
 

SPX PCS delayed trades week 5
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 $550.00 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: $5,457.00
Last week ending value: $6,007.00 (+66.86%)
The highest capital requirements to trade this strategy: $11,998
Unrealized Gain: $972 (+8.81%)
Realized Gain: $1,435 (+13.01%)
Total Gain: $2,407 (+21.83%)

 

SPX PCS account value
SPX PCS account value
 
Our SPX net-liq increased a bit last week. 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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