Low Risk Short-Term SPY Put Credit Spread
SPY Exchange Traded Fund (ETF) Credit Spread (NYSEArca:SPY)
TheOptionPlayer.com recommends an S&P 500 ETF mid-term (37-day) bullish option strategy. Investors could simultaneously: Sell the December expiration SPY $114 put for 1.87 (yesterday's closing price) AND Buy the December expiration $109 put at 1.20 (yesterday's close) The difference between funds received and paid out is a .67 credit which we keep if the SPY ends above $114 on December 16th, but immediately exit the position if there it appears the price will end up lower.
ETF Description: The SPY seeks to correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Index. SPDR Trust is an exchange-traded fund that holds all of the S&P 500 Index stocks. It is comprised of undivided ownership interests called SPDRs. (Source: company press release or website)
Why we recommend it: As indicated in the weekly chart below, the SPY (NYSEArca:SPY) price is trending upward and has stayed above the $114 technical support level since the beginning of October. At the very least there is a high probability that the price will remain above the $114 target for another 37 days.
Y-T-D Return: + 1.18%
52-Week High: $137.18
52-Week Low: $107.43
Average Volume (3 month): 295,651,000
