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Two special circumstances today:
1) the Fed meeting. I don't think there are any huge surprises coming out of it. Maybe the dot-chart might stir up things, though.
2) We got the 9/17 expiration (stops trading on Thursday but settles at the Friday open).
Re 1: I usually like the Fed meeting days. There's a lot extra implied vol.
Re 2: I sold the 9/17 puts so far targeting around 0.65 to 0.75 (because it's really only a 1.5-day trade). Then depending on how things move today and tomorrow, probably roll into 9/18 puts already on Thursday. Or maybe roll straight into the 9/21 puts on Friday early morning.
Re2: Does an overnight drop hurt you when the option closes in the morning? If it gaps down on a Friday open below the strike, do you lose, or are you locked in at Thursday close?
Like your strategy and I just sold Friday AM settle. Trying to keep by overall delta between 2 and 4.
@navypack The settlement is at the Friday open. So you do lose if the market drops enough overnight. But again: you get paid for taking on the extra risk.
@earlyretirementnowcom that is what I thought, but taking chance to validate.
Sold 9/18 PM around 250 pts OOM (2 delta) for 0.85, which feels safe for 1.5 DTE.
Always like selling when market is down for day and bouncing on lower band on 10 and 20 day charts.
Sold 9/21 PM put around 150 points OOM (3175) at 1230 EST for $1.10, which I think was a 3 delta.
Market kept going down after that, but now rebounded.
My strikes are 3180 and 3190 for the early trades on Friday. But then moved down to 3110, 3135, and 3160 for the subsequent trades after the market dropped during the day.
Looks safe to me! 🙂
Getting spicy today with SPX down 90 to 3230. Glad the weekend only has 1 trading day.
VIX is up, so today's trade (Wednesday expire) hopefully is way OOM.