Alert: Close SPX Dragonfly

Ticker: SPX
Price: $4053
Date: 4/26/23 3:00 PM

Underlying: S&P 500 Index Fund

Est. Net Debit/Credit: $3450 debit

Master Portfolio Contracts: 5 (and 10)


This cycle the dragonfly is just not cooperating. We had very small profits on Monday but with the market moving down it makes sense to do something with the dragonfly now. As you have seen, these typically work out very quickly. Earlier in the week I was looking at modifying it to the upside to extend profits but now we’re looking at the downside and that is usually where they do not work. I have looked at modifying the trade in several different ways including back ratio, leapfrog adjustment, and adding a few longer dated long put but they are all very expensive.

These trades work out so often my best recommendation is to just close it now for small losses and then we will reload it on Friday. We typically win about seven to nine of these for every loss. We’ve only had two losses in a row. Let’s just close it, save the capital, and reload it on Friday.

Prices are a little wide so work the order by 5 cents at a time. SPX is very liquid. I often get fills an hour or two after the alert goes out at similar or even better prices. However, with the market bouncing around if you can close it when the market is higher you could probably get a better price. But since it appears to be accelerating to the downside, I would just exit at whatever decent price you can get.

Trade Detail:

STC 5x SPX 5 MAY 4050 put
BTC 10x SPX 5 MAY 4020 put
STC 5x SPX 5 MAY 3950 put
Price 6.50 – 6.90 debit (Prices are wide!)