I am recommending we roll our standalone S&P 500 (SPX) put to a lower strike to collect profits while remaining hedged.
If you are not currently in a hedged position, you can initiate one now by purchasing the lower-strike put. Just be aware that we will be tracking this as an ongoing position. Also, note that this is meant to be a purely defensive put. The goal is for it to expire worthless. It will only result in a profit if the market continues to sell off sharply.
If you are new to this kind of hedging, please check out my new Coaching Session on Hedging Your Portfolio before making the trade.
Note: No action is needed on the SPX Feb Monthly (2/19) 3225/3175 Put Spread at this time.
Net Debit: $17.45
- Sell to close the SPX Feb Monthly (2/19) 3225 Put for around $8.80
- Buy to open the SPX Feb Monthly (2/19) 3125 Put for around $6.30
- Set initial credit limit at $2.50
New Net Debit: $14.95