SPY Calls with Risk Reduction

I am more inclined to be bullish the SPY but I mitigated my risk by structuring it accordingly.

Sell Calls 24 July - Strike 340, 1.14, Qty 3
Buy Calls 31 July - Stike 312, 11.50, Qty 1

This gets me a bearish risk of -$1612, Max Win of $3940. Worst case scenario is when price goes beyond 349 before my expiry. I bought different calendar dates to get a more favorable price. I am also happy for my sold contracts to expire early as there is a chance if the price is rising rapidly I can additional gains with my calls that expire later.

Market Rises/Range Scenario
✔ - Cities start slowly reopen
✔ - Earnings has companies forecasting the worst of 2020. However investors seem optimistic/lukewarm
✔ - CN could report positive economic news that will encourage positive vibes
? - Europe could show positive recovery
✔ - US weekly unemployment numbers are slowing down
? - US second stimulus package (May)
✔ - Positive vaccination news
? - Lower income consumers are the most impacted, however that won’t dent investor that deem key stocks as “cheap”
✔ - US retail numbers are improving (18% in May)
✔ - Above tested 200 MA
✔ - No longer in RSI over bought

Market Crash
? - Europe sinks into a clear recession
? - Breakdown of second stimulus package
✔ - CN hits a repeat lockdown or resurgence in virus
? - FED keeps pushes dire warnings of economy and this becomes an early warning
✔ - Credit card and mortgage defaults spiral (After Aug)
? - RSI goes further down
? - June Retail numbers drop due to riots

Komen:

WSJ - 18 June 2020 (Real Time Economics newsletter)
Permits to build new homes in the U.S. jumped more than 14% in May, mortgage applications to buy a home rose to the highest level in 11 years during the second week of June, and home-builder optimism has rebounded this month. But actual building remained muted, with new construction posting only a modest gain last month. That all suggests a bounce in construction this summer, though the longer-term outlook will depend on the pace of recovery for the labor market and broader economy.

Komen:

WSJ - 22 June 2020
Prices for raw materials including oil and copper are surging as the world economy reopens for business, a signal to many investors that global growth is returning more quickly than anticipated.

Komen:

With Trump starting his election rallys I think we can expect him to roll out more tweets that would drive the market higher.

Komen:

Seems like the resurgence of the COVID-19 virus in the US might become an issue if the states go into a second lockdown. For now, traders still seem very optimistic.

Dagangan ditutup: sasaran tercapai:

Contracts expired with price only slightly in my favor. I still collected a sweet $415 ho ho :)