Shorting the S&P 500
Currently shorting the old Standards & Poors Index via the SPDR S&P 500 ETF (exchange traded fund).
Doing this trade in my paper account (simulated trading) and my strategy: selling 20 contracts of the 20 April $279/$290 call spread. So far so good and as long as the S&P (SPX) continues down or trades horizontal my trade is and will be profitable. This is me betting the SPY will remain under $279 over the next few weeks
Factors of the trade:
high win probability
call options instrument
bear call spread aka credit spread
credit spread has two legs
sell "out of money" call above stock price
buy "out of money" call further above the one you sold
both calls must have same expiration
defined risk (capital requirement)
defined max profit (don't get greedy!)
Never be too cool to paper trade. Next few days in the market will be rough so we are beginning to put on bearish trades.
