It was another profitable week for us at SPX Option Trader! We ended this past week with +71% ROI in our SPX Daily Outlook trading, +74% ROI in our SPY Daily Outlook trading, +36% ROI in our SPX Aggressive Trader, +38% ROI in our SPY Aggressive Trader, -3% ROM in our SPX Spread Trader and +61% in our SPX Late Day Trader. To say this past week was volatile, would be an extreme understatement. Despite the roller coaster ride we saw in the overall market, we had 100% accuracy in forecasting the 1st target level in the SPY each day of this past week. Remember, one of the key advantages of being a day trader, is that overnight moves do not impact us! We simply focus on where the market is moving today, and that is our only concern. With the SPX Daily Outlook we have the edge in knowing where the markets are headed before we trade.
Due to the high price of options and extreme volatility in the markets this past week, we had several days with no trades in our Daily Outlook and Late Day Trader. Part of being a successful trader is knowing when to trade and when not to trade. In our opinion, when the options are so expensive, it is best not to day trade them. For example, when the option on SPX is near 30 a contract, it means the SPX must move 30 pts just to make 100% profit. That historically has not been a good risk to reward ratio. Because even if we see a huge move in the market, we only stand to make 100%, while our risk remains the same as always. That is why we do not trade if the options are too expensive.
No matter the price of the options, we still provide our SPX Daily Outlook each day, so a trader can certainly continue to trade the market on these days, if they desire. Our forecasts remain a reliable tool to use in all market conditions. But we believe it is best to wait when options are so expensive and not take the risk. Extreme moves like we’ve seen this past week are not unexpected in the market. We’ve seen this happen before and eventually the volatility will settle out and the markets will return to more normal trading. Until then, we stay consistent and trade only when conditions are favorable. So, we look forward to another great week ahead of us, day trading SPX and SPY options on expiration day. Below are our comments for each trading day of this past week.
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