75 years ago today, my dad took a stomach-churning trip across the English Channel to Utah beach, then spent the next 11 months in a European “experience” that I have had the vast good fortune to avoid. Luckily, he made it back and spent the next several decades quizzing us kids on math problems at the dinner table. That was, er, fun. Speaking of dubious fun, the SPY has rallied back on hopes of a rate cut in a weakened economy. Let’s face it though, the big stocks like GOOGL, FB and AMZN are getting pummeled by the threat of the Feds scrutinizing their businesses. Since we know how Washington works, that’s an experience that could stretch on for a while. SPY’s IV rank is only 37%, and its IV suggests (unfounded) complacency. That’s why a contrarian bear might see an opportunity in a debit spread. The long put vertical that’s short the 282 put and long the 284 put in the July expiration with 43 DTE is a bearish strategy that has a 63% prob of making 50% of its max profit and generates $.19 of positive daily theta.
Opened 19/06/07 for $.74 debit
Closed 19/06/17 for $.47 credit