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