Opening (IRA): SPX July 23rd 3940/3990 Short Put Vertical
... for a 3.60 credit.
Comments: Selling the 16 delta strike and buying the put 50 strikes out from there to emulate dollar cost averaging into the broad market with more room to be wrong than buying at-the-money. 7.8% ROC at max; 67.8% annualized at max. 3.9% ROC at 50% max; 33.9% annualized. Generally, take profit at 50%; take loss at 2 x credit received.
Comments: Selling the 16 delta strike and buying the put 50 strikes out from there to emulate dollar cost averaging into the broad market with more room to be wrong than buying at-the-money. 7.8% ROC at max; 67.8% annualized at max. 3.9% ROC at 50% max; 33.9% annualized. Generally, take profit at 50%; take loss at 2 x credit received.
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