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Buy Put SPY

September 6, 2022
Adjust Existing Position: Against your SPY March 420 Put, Sell the March 320 Put for $6.50 or more.

The market is down again this morning, and looks susceptible to even greater losses if the bulls don’t step up soon. And while it is possible that the S&P 500 could be on the precipice of greater losses, it is also possible that the index could rebound soon. Essentially, the market is back in the chop, where any outcome is possible.

Because of this uncertainty, I am going to turn our SPY March 420 puts into a bear put spread by selling the March 320 puts. This will lower our cost basis on this tradefrom $25.45 to $18.95 (approximately).

To execute this trade you need to:
Sell to Open the March 320 Put

Once this trade is complete, the new position will be:
Long SPY March 420 Put
Short SPY March 320 Put

Please note, even though we are selling a downside put, there is no question this position is still bearish. However, this put sale will be a mistake if the SPY falls well below 320 by March expiration, as I will have limited our downside profit potential to “only” 425% (approximately).

August 30, 2022
Sell HALF of your SPY March 420 Puts.

The market puked on the close yesterday and is down again this morning. That means it’s time to exit our QQQ December 285 calls as I’ve given this market enough rope, and it’s time to move on. However, at the same time, we are also going to sell HALF of our SPY March 420 puts for a quick profit.

To execute this trade you need to:
Sell to Close HALF of your SPY March 420 Puts

Please note, if you are bullish on the market, you can hold a couple QQQ calls, just in case this is one last shakeout.

If you are bearish or need a hedge, you can choose to hold your full SPY put position.

However, I am fully exiting our QQQ Calls and keeping half of our SPY puts.

August 11, 2022
Roll Position: Sell your SPY September 455/375 Put Spread, and Buy the SPY March 420 Puts (exp. 3/2023).

Today we are going to exit the final piece of our SPY September put spread that worked very well. However, because we have a very bullish portfolio, we are going to immediately roll into a buy of the March 420 Puts so that we have a hedge in the portfolio.

To execute this trade you need to:
Sell to Close the September 455 Puts
Buy to Close the September 375 Puts

Then

Buy to Open the SPY March 420 Puts

As is always the case when we buy puts against a bullish portfolio, we hope these puts lose value and the balance of the portfolio continues to trade higher.

Two more points …

This new hedge will allow me to add even more bullish exposure to the portfolio should the market continue to strengthen.

If you do not own the September puts, I have no issue with you buying the March puts.

May 11, 2022
Sell a Third of Your SPY September 455/320 Bear Put Spread.

The market has stabilized (MAYBE) in the last two days, and I’m slightly encouraged that for now the indexes didn’t fall apart after a “hot” CPI number this morning. Because I’m a touch more intrigued about market stability, I am going to lock in our big profits on another piece of our SPY puts, while at the same time selling another piece of our MRVL calls that are, for the time being, not working.

To execute these trades you need to:
Sell to Close a Third of your SPY September 455 Puts
Buy to Close a Third of your SPY September 320 Puts

Please note, in this wild market, these sales could be a mistake in the blink of an eye. Also, if you are bearish on the market, I have no problem with you continuing to hold your SPY puts looking for greater downside.

May 5, 2022
Adjust Existing Position: Against your SPY September 455 Puts, Sell the September 320 Puts for $4.50 or more.

For better or worse our SPY September 455 Puts are in great shape as the market is again probing the recent lows. And while I think the market looks suspect (at best), I am also open to the indexes stabilizing in the days/weeks to come.

This brings me to my decision to spread off our September puts, by selling the 320 puts. By doing so we will lower our cost basis on our position to $18.90 approximately, but at the same time, this position will protect us against further declines of around 23%.

To execute this trade you need to:
Sell to Open the September 320 Puts

After this adjustment our net position will be:
Long SPY September 455 Puts
Short SPY September 320 Puts

The ideal spot for this spread is at 320 on September expiration as this trade will be worth $135, or a profit of approximately 600%.

Please note two more items on this trade …

First off, even though we are selling a put today, this net position is still wildly bearish.

Second, even though we are selling a put today, I could choose to sell the position at any time based on market conditions.

April 11, 2022
Sell a Third of Your SPY Sept. 455 Puts for $28.50 or more.

While I am on vacation, I am still monitoring the market and our positions. Today we are going to take advantage of the market’s weakness and lock in a profit of approximately 25% on our SPY hedge.

To execute this trade you need to:
Sell to Close a third of your SPY September 455 Puts

If the market continues to weaken, we may end up selling additional positions in the days to come.

March 31, 2022
Buy S&P 500 ETF (SPY) Sept. 455 Put (exp. 9/16) for $25 or less

While I think the market looks pretty good, the VIX, and option prices in general, have fallen to the point that it makes good sense to add a bearish position to the portfolio to balance off our bullish positions.

To execute this trade you need to:
Buy to Open the SPY September 455 Puts

The most you can lose on this trade is the premium paid, or $2500 per put purchased.

Stepping back, it’s possible that I will get both trades wrong. Maybe the S&P 500 charges higher, which would hurt our puts, while MRVL falls apart.

That being said, I like the way MRVL looks, and with a diversified portfolio of stocks, with the potential to add even more exposure, it makes sense to add a hedge today.

Below are three notes on MRVL:

Today – Bank of America: “Management meeting bullish tone, multi-engine growth across top end markets … Solid demand visibility across key infrastructure markets ... strong model leverage w/ $4 in long-term EPS power ...” Maintain BUY, 115 PT

Last week – “We like MANGO!” ".. a combo of MRVL, AVGO, AMD ADI, NVDA GFS and ON. We have high conviction these stocks are levered to the right end-markets with solid demand visibility.”

3/14 – In an interview on CNBC’s Mad Money, Matt Murphy said all five of the company’s end markets are growing, but the data center market has been on fire. Demand and CapEx from the cloud is very strong, he added. He expects 5G revenue to accelerate this year, especially in the second half. Demand continues to outstrip supply due to supply chain issues. Murphy sees “very robust demand” in 2023 and 2024.

Position (Original)SPY September 445 Put
Position StrategyBuy Put
Opened DateMarch 24, 2022
ExpirationSeptember 16, 2022
Net Price23.43
Strike445
Jacob Mintz is a professional options trader and editor of Cabot Options Trader. Using his proprietary options scans, Jacob creates and manages positions in equities based on unusual option activity and risk/reward.