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Weekly Report 2022-04-10

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WEEKLY MARKET OVERVIEW 

Despite a solid start to the week, with a Monday session dominated by buying pressure, the S&P500 (SPY) gave up all of its gains on Tuesday and even gapped down at the open on Wednesday.

However, the new potential wave of selling pressure failed to materialize, and the remaining days revealed a consolidation pattern above the weekly lows.

Following this unsuccessful attempt to move back above the key $454 level (that resulted in a shallow pullback), we'll see what direction the market takes over the next (4-day) trading week.

 

Weekly market performance (Week 14/2022)

 S&P500 (SPY) -0.27%
 Nasdaq100 (QQQ) -3.51%
 Dow Jones Industrial (DIA) -0.18%
 Small Caps (IWM) -4.67%

In this indecisive market environment, the Market Volatility Index (VIX) remains just above the 20 level.

 

WEEKLY PERSONAL PORTFOLIOS OVERVIEW 

When used in the proper way, vertical credit spreads are one of the simplest and most effective option selling strategies, making them suitable even for traders with low experience and limited funds.

Inside the Options Trading Club (OTC), on Monday, March 28th, 2022, I started the 6K SPY Challenge, in which I allocated $6,000 of my own money to only play vertical credit spreads (both put and call spreads) on the SPY ETF. Each position has a $500 maximum risk, and I intend to open 2-3 new trades per week, with a maximum of 12 open positions at any given time.

On Wednesday, with the market setting the ground for a possible bounce, I decided to close the first trade of the 6K SPY Challenge for a nice profit.

I bought back to close the SPY 04/27 Credit Call Spread 477/482 for a $0.05 debit, keeping 83% of the premium in only 33% of the trade's maximum length period. Excluding commissions, this trade produced an outstanding 175% AROI (Annualized Return On Investment) over 10 days.

Inside the 6K SPY Challenge, I now have three open positions (all on the put side) that I will be looking to manage over the next week. In addition, I'll be looking to open new trades based on what the market does next.

As usual, if you have any questions, just send me an email at [email protected]

Take care and trade wisely!

- Gianmarco 

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