Disclaimer
This is for informational purposes only.
Discussion
Trade: Bought a 1/4 position in the November 17 SPY $450 calls.
Rationale: This is the first leg of a three-part trade. On any rallying this week (perhaps even today if the market rips hard) I will put on a 1/4 position in November 17 SPY $400 puts, and a 1/2 position in November 17 SPY $440 puts. It’s time to zoom out and look beyond the chop to the post-8/25 Powell Jackson Hole speech.
I have extremely high conviction the bottom is going to fall out in the September/October period, but I want a bit of a hedge in the event A) I’m flat out wrong, and B) in case the market decides to view 8/25 Powell as a “clearing” event and knee-jerk rallies before the final implosion. By entering the hedge leg of the trade now into weakness, I can assess the strength of any OPEX-driven rallying and keep my options open (no pun intended) for layering on the put legs.