S&P 500 Index Weekly Income Trade

By Gregory Clay of TheOptionPlayer.com

Thursday, August 25, 2016 12:24 AM EDT

TheOptionPlayer.com sets up S&P 500 Index (SPX) short-term (7-day) option strategy. Investors could simultaneously:

Sell the August 31st expiration SPXW $2200 call for $2.10(Wednesday’s closing quoted bid/ask mean)
AND
Buy the $2205 call at $1.40

The difference between funds received and paid out is a $.70 per share credit which we keep if the S&P 500 index closes below $2200 on Wednesday August 31st but immediately exit the position if it appears the price will end up higher. If the price gaps higher open the trade using higher strike prices. See Guidelines for explanation on how trade is set up.

Why we recommend it:
As confirmed in the chart below, the S&P 500 Index (SPX) has stabilized near its all-time high with price momentum stuck in neutral. We are betting the S&P 500 Index won’t reach the target price prior to option expiration next Wednesday. We recently executed similar trades that were profitable. See the link for the previous trades

52-Week High: $2190.15
52-Week Low: $1829.08

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S&P 500 Index Weekly Income Trade

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