Rocket Equities & Options SPY Options Debit Put Spread 11-05-20
SPY Debit Put Spread
We're going to buy a put spread looking for a pull back in the SPY with defined risk if indices accelerate higher. The SPY is now up 8.4% just from Friday's intra-day low.
Buy the SPY Nov 6th $349 put.
Sell the SPY Nov 6th $345 put.
This should result in a cost (debit) of about $1.25 per contract. Our max risk is the $125. Our max profit is $275 if the SPY closes under $345 by Friday. This position is out-of-the-money right now, so we lose our entire investment if the SPY closes Friday where it currently is. Set your risk accordingly.
Buy the SPY Nov 6th $349 put.
Sell the SPY Nov 6th $345 put.
This should result in a cost (debit) of about $1.25 per contract. Our max risk is the $125. Our max profit is $275 if the SPY closes under $345 by Friday. This position is out-of-the-money right now, so we lose our entire investment if the SPY closes Friday where it currently is. Set your risk accordingly.
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