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HiPOS Update: What You’ll See as the HiPOS Trade Expires + Jay Pestrichelli Shares Tech Earnings Impact on Fox Business Mornings with Maria

HiPOS (High Probability Options Strategy) S&P 500/SPX Technical Analysis

By Derek Moore

HiPOS Conservative Realizes Full Profit Target

  • Today our current HiPOS Conservative short put spread will expire worthless. Worthless is exactly what you were rooting for as that means we capture our full profit target.
  • As sellers of volatility, we take in premium and eventually want the value of the spread to go to zero at expiration day.
  • Although the S&P 500 Index dipped mid trade, the distance out of the money from the short put never got to a point to legitimately threaten prices materially.

What to Expect in Accounts Around Expiration Day?

  • Over the weekend you will see an entry into the account history “removal due to expiration”. This is when the position will be removed from the account.
  • The account will then see only a cash position. Remember cash is the collateral utilized to how the short spread positions against.
  • You most likely won’t see the account reset to reflect everything until Monday.

When Will We See a New HiPOS Position?

  • The ZEGA trading team is always looking at the market and strategizing on new positions and even if there are opportunities that benefit you and your clients in the current trade.
  • You probably have noticed that this year we’ve been able to roll from expiration to new trade quickly. This is because volatility has remained elevated throughout the year.
  • When volatility is lower, you will see more of a break between expiration to new trade. Historically HIPOS Conservative remains in cash waiting for the opportunity to deploy that capital.

We will of course be back on the blog next week if/when we put on a new position for this group.

Jay on FOX Business Channel “Mornings with Maria”


Thanks to Dagen McDowell who hosted the panel discussion Jay was on this morning.

  • Jay talked about the mixed bag of performance pre big 5 tech earnings release coupled with the post earnings increases we’ve seen in the past few years on a quarterly basis.
  • Goldman Sachs earnings release and bank earnings in general being strong of late