Stocks are dropping sharply following the Federal Reserve’s June monetary policy decision. While it held rates near zero, Fed officials projected two possible rate hikes by the end of 2023.
Our S&P 500 (SPX) put is profitable, so I am recommending we roll it to a lower strike. This will reduce the cost of our hedge while keeping it in place.
Note that no action is needed on our SPX Jun Week Four (6/25) 4000/3950 Put Spread at this time.
Current Index Price: 4,209.31
Net Debit: $5
- Sell to close the SPX Jun Week Four (6/25) 4000 Put for around $6.90
- Buy to open the SPX Jun Week Four (6/25) 3900 Put for around $3.90
- Set initial credit limit at $3
New Net Debit: $2