Weekly Trade Closed For Profit In Anticipation Of Adjustment
Today I closed a put credit spread on SPY by buying back the short put for $0.01. This will leave us long the remaining puts that will expire worthless tomorrow. Trade profit is reduced by the $0.01 debit to close and commission expenses. Still a nicely profitable trade: 6.42% in 7 days.
This SPY closing trade is a proactive trade to free up the potential margin in case an adjustment is required to the XEO Call Credit Spread side of the Iron Condor I currently have. A potential adjustment may require me to expand the XEO trade from 5 strikes wide to 10 strikes wide.
I am looking at an adjustment that will place the short strike above the declining 50 Day Moving Average and would generate additional credit. This would allow me to reposition the trade into safer territory and get paid to do it - always the preferable outcome :)
The adjustment would be treated as an additional spread (margin requirement-wise) as it would not be able to use the 5 point wide put spread margin to create another Iron Condor (if the new call spread adjustment goes to 10 points wide). Therefore, closing this SPY trade frees up the margin if needed. The put side of the Iron Condor will be expiring profitably tomorrow anyway so no need to worry about doing anything with them.
Navigate wisely and stay profitable, my friends. Happy trading!
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Posted-In: SPYLong Ideas Short Ideas Trading Ideas
