After the Fed rally this week, the SPY is trading at the upper range of our P/L chart for our core diagonal trade position. We have 43 days left on our long option and our short call is well in the money. If the market continues to rally, we will need to add a leg to this trade. If it falls back, we can manage the current diagonal spread. In the meantime, let’s roll our short call out two weeks and up a strike.

TRADE ROLL

SPDR S&P 500 ETF (SPY):  417.57

TRADE ACTION: ROLL the SPY 3 Feb 397 call to the 17 Feb 398 call for a net credit of around 0.75 to 0.80

BTC the SPY 3 Feb 397 call

STO the SPY 17 Feb 398 call

The Master Portfolio is trading 3 contracts.