Advanced Trading Methods

[dr_praeses]

Here's a fun one I ran on the paper account:

Read about this move in the WSJ due to low low low VIX / VXO:

Bought 2 SZTXN SPX Dec 07 1275 puts @ 37.20 each. Total cost = $7,440.00

Sold 4 SZTXB SPX Dec 07 1225 puts @ 24.6. Total credit = $9,840.00

The 1275 puts are free.

I make money (my credit + whatever I can get for the sell of the 1275 puts) if the SPX stays anywhere above 1275.

I make money (profit from the 1275 put + credit from 1225 puts) if the SPX stays anywehere above 1225.

I only lose money once the SPX goes below 1225.

Which, IMO, is not happening.

Nice neutral to bullish credit ratio put spread (big phrase)