After entering our primary HIPOS trade earlier this month, the market moved higher and has remained in a sideways pattern since. Sideways works just fine for your clients in the trade as it has remained well above the defensive purple exit curve. Roughly 12% above as of the open this morning. As we benefit from time decay, it also means that we are now closer to expiration on February 2nd.

A few advisors asked recently whether with the spreads almost at full profit might we try to fit in an extra trade prior to expiration. When they refer to full profit, remember we sell premium via a spread trade. Full profit would result in the positions expiring at zero or worthless. Currently the market value of the spreads is only nominal – but not full.

Our traders do continue to review the existing positions and analyze whether there is an opportunity to roll early. This would be where we simultaneously close out the existing position at a gain and put on another position to expire later. Two things are in play here: First, we must be able to trade out of the existing position in an advantageous manner for your clients. Secondly, there must be a trade that meets all of our strict criteria for entry.

If we do find an opportunity to roll positions, we will update all of you via our blog postings. If you haven’t already signed up to receive notifications automatically when we post something new, it is easy. Simply click in the upper right hand corner blog & insights and fill in your information.