Today we will continue our discussion of both SVXY and the actual portfolio we are carrying out with only two positions. Every Friday, we will make a trade in this portfolio and tell you about it here.
Our goal is to earn an average gain of 3% a week in this portfolio after commissions. So far, we are well ahead of this goal.
I hope you find this ongoing demonstration to be a simple way to learn a whole lot about trading options. We will also discuss another Greek measure today – gamma.
Ongoing SVXY Spread Strategy – Week 6
Near the open today, SVXY was trading about $89.00. We want to sell a put that is about $1 in the money (i.e., at a strike one dollar higher than the current stock price). Our maximum gain each week will come if we are right, and the stock ends the week very close to the strike of our short put.
Here is the trade we placed today:. . .