RVPCS – 11.07.2014

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Russell 2000 – Vertical Put Credit Spread

Observations of the RVPCS to other traders:

I’m going to take a pass on the RPVCS again this week.  There is still a “disturbance in the force” of large OI in the lower areas of strikes.  I’m feeling that there is an institutional advantage being played out here.  Retail traders are unable to make any profits in these areas and are effectively pushed out.  With one less trading day next week, there is a higher chance of ‘problems’.  I can remember my loss was a week after July 4th.  I’m limited with access to technical charts.  RSI is 55; MACD is above signal line and almost to zero.  Price has gone from 1040 to 1170 in three (3) weeks.  Price now seems to be in a trading range from 1160 to 1170.  There seems to be resistance at 1175.  I suspect the markets will be bullish as we enter the Christmas season.  Dovish FED abounds.  The market had its reset moment and now we’re flying high again.  It’s interesting to see the combination of issues regarding this trade.  IV is still high, even though price has rocketed.  OI is incredibly low.  What does it all mean!!!???  Not sure, but since it’s something I’ve not seen, I’m sitting the sideline and observing. 

Disclaimer: The information presented does not consider your personal investment objectives and should not be taken as a recommendation. Further, it shall not be construed as an offer to sell or a solicitation to buy any security mentioned. The risk of loss in any stock, option, or futures trade can be substantial. Consider all relevant risk factors before trading.


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