SP-CD, Trades S&P Options, Credit & Debit Spreads

1) Performance Summary October 2010 – May 2020

Recommended Starting Balance $25,000.00
Cumulative Net Profit
$210,964.22
Maximum Drawdown (-35.43%)
($8,858.22)
Best Year 2017 +155.01% $38,751.61
Worst Year 2016 +48.84% $12,209.63
2013-2020 Average +110.07% $27,517.07
2020 +69.90%
$17,474.03

Performance is based on trading one $25,000 unit, never adding units and withdrawing all net profits annually. The SP-CD program uses leverage and has a realistic risk factor of $15,000 per unit, if you are not in a position to comfortably assume this risk you should not participate in this program.

Risk Disclosure    Defining Account Risk

2) About this program

Spreadsheet for online reviews

This programs writes credit spreads and/or volatility spreads in options with expirations of 1 day to 3 weeks to collect time premium and buys debit spreads with 1 to 6 months to expiration to hedge risk.

Example trade

Credit spread collects $181.75 per day, expires in 4 days

Trend is higher with the market trading at 3.330.00
Sell 1, at the money 3,325 put and collect 24.50 points
Buy 2, 3,225 puts out of the money paying out a total of 8.40 points
Net time premium collected = 16.10, value $805.00 per spread, expiration 4 days
Net time value collected after bid/ask spreads and all fees = 3.6350 points per day
Value of net time premium collected  = $181.765 per day

If the up trend in the S&P 500 continues or the market stays the 4 days options will expire worthless, we keep the net credit after all bid/ask spreads and fees of $727.00 then write another 1 X 2 credit spread for the following week using the same procedure.

If the market moves down hard the 2 put options we purchased 100.00 lower at 3,225 expiring in 4 days will engage, the first put hedges the 3,325 put we wrote, the second put would capture any move below 3,225.

This credit spreads pays $181.75 per day

To further hedge the position we buy a debit spread with an expiration of 1 to 6 months, in this example the June 3,325.50 3,125 put spread expiring in 109 days

Debit spread to hedge paying out $22.50 per day, expires in 109 days

Trend is higher with the market trading at 3.330.00
We buy 1, 3,325 put expiring in 109 days paying out 97.50 points
Sell 1, 3,125 put 200.00 lower expiring in 109 days, collecting 48 points
Net paid out, 49.50 points for 109 days
Cost per day net of all bid/ask & fees =  0.4684 points
Net cost per day  =  $23.4220

If the market moves down hard in the net 109 days
The 3.325 put engages and captures the move to our write at 3,125
Gain = 200.00 points
Cost of the option = 49.50 points
Net points made = 150.50
Net after all bid ask spreads and fees = $7,447.00

The debit we purchased is costing us $22.50 per day.

Our risk is the maximum of the premium collected on the 3,330 – 3,320 X 2 credit spread expiring in 4 days (727.00) less what we paid out for the 3,390 –  3,130 debit spread expiring in 109 days (-$2,453.00) or -$1,726.00 net of all bid/ask spreads & fees.

The objective is to keep rewriting the options with weekly expirations collecting an average of $727.00 per week for the next 15 weeks (+$10,905.00) while maintaining the debit spread we purchased for (-$2,375) or, if the market makes a hard move lower to capture a piece of this move lower.

During the 109 day period we will likely have to adjust the debit spread hedge but we’ll always collecting more time premium daily than paying out.

4) Online reviews

Spreadsheet

If you’d like to learn exactly how this program works contact me, using this spreadsheet  I’ll walk you through how we generate and maintain trades, when we’re done you’ll be able to verify past performance, duplicate trades forward as they occur.

CME Option Quotes
BC Option Quotes
Daily Chart
Weekly Chart
Monthly Chart
Market Opinion

3) About Automated Trading Accounts (ATAs)

Automated Trading Accounts (ATA)
The Fee Structure For This Program
Defining Overall Risk For Your Account

Exchanges Traded
Brokerage Firms
How Balances Are Guaranteed Plus or Minus Trading
How To Open An Account

4) Educational Videos & Links

Educational Videos & Resources

4.01 Futures General Information
4.02 Options General Information
4.03 Currency Futures
4.04 Stock Index Futures
4.05 Interest Rate Futures
4.06 Metals Futures
4.07 Energy Futures
4.08 CME Learning Center
4.09 Futures Fundamentals
4.10 Education Material
4.11 Resource Center
4.12 Research Reports
4.13 Podcasts
4.14 Monthly FX Review
4.15 Media Room

Contact me with any questions

Regards,
Peter Knight Advisor

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Privacy Notice

Disclosure

 

 

If you have questions contact me.

Regards,
Peter Knight

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Privacy Notice

Risk Disclosure

 

 

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Asset Investment Management

Family Office, Advisors