Sold one 75 call at 2.82 SPY at 74.63, sold two more at 3.0 SPY at 74.97 effect debit 71.90
Premium 3.10 60% credit point 73.76
I have been looking a lot at hedging strategies -- the underlying price and time remaining on the option make the delta calculation challenging. Surprisingly option delta doesn't really start dropping off until about 5 days before the option expires. The ultra short S&P ETF (SDS) is pretty interesting because it only requires 25% of the buy/write capital to provide a .5 delta hedge to match the option behaviour. These ETFs might also provide some helpful delta modulation due to the fact that they carry the "Constant Leverage Trap" -- it actually might work in my favor because it appears to reduce the effective delta on the SPY up scenario. Selling covered calls on SDS makes my head hurt. I need to resurrect by Black & Sholes spreadsheet and do some simulations on this stuff. My intutition is definately not up to the task.
I also need to think some more about taking quick profits. I have missed out several times on 30% of maximum profit sorts of opportunities very quickly after I make the trade. I need to consider a guideline there--basically an intraday guideline.
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