This strategy is return-based with unlimited risk, relying on margin - Traditional Options on IBKR.
Trade Updates:
Jan 28: Up 1.26%. Nothing to do here .. let it run to expiry.
Jan 26th: Up 1.19%.Nothing to do here. Letting it run to expiry.
Jan 23rd: No change since yesterday. We will let this trade run to expiry.
Jan 22nd Update: The ongoing rally in the S&P 500 has moved our position into 0.9% gain in just two trading days. We are maintaining the position until expiry to capture our projected 1.3% Return on Portfolio value in just 9 days.
Jan 21st Update: Monitoring mode for now. We are letting the trade run to its scheduled expiry, where we anticipate a total 1.3% Return on Portfolio value in just 9 days.
Original Trade information:
I. Setup & Rationale
Underlying Ticker: SPY (S&P 500 ETF) - also XSP for smaller account sizes
Current SPY Price: $684
Market Outlook: Strong Bullish/Neutral - A significant drop is not expected.
Goal of Trade: Maximum Premium Income / Return on Margin (RoM)
Probability of Profit (PoP): 97% (this is the main attraction of the strategy)
II. The Trade Details
Action: Sell to Open (STO) 1 Naked Put Option
Strike Price: $650
Expiration Date (DTE): Jan 30th 2026
Premium Collected: $1.2977 per share
Total Premium Collected per contract: $129.77
III. Risk & Profit Metrics
Maximum Profit: (The credit collected) $129.77
Breakeven Price: $648.70 (We need the stock price to remain above to price at EXPIRATION to make a profit)
Initial Margin Required: $6,000 (But this depends on numerous factors such as your account size and other positions in your account).
Potential Loss: unlimited...losses continue to increase as the share price falls further below break even.
IV. Trade Management & Exit Plan
Take Profit: Leave expire worthless.
Trade Mgt (Critical): If SPY share price gets within 1% of strike price we will immediately roll out to the next monthly expiry and down to a strike price that gives us at least a $0.01 cent credit. As it stands now we could roll down to end of February to bel0w the $610 strike.
📞 Strategy Call Assistance
If you require assistance with trade setup, risk management, or strategy review, please schedule a strategy call.
PREMIUM Plan Members: Strategy calls are included in your plan.
All Other Members: Strategy calls can be scheduled at a rate of €100 per half hour.
