What you could learn from last weeks rare open interest: Last week here I discussed that SPY 273 was likely a magnet, but that it probably would not pin there. I described how you could use the type of open interest we had (a rare open interest) to determine the type of trading environment we were in (on a very short term basis). If you haven’t read it and are truly trying to learn and increase your edge in this game then I highly suggest you go back and read it.

The way we played it at SassyOptions premium is by remaining patient while price remained around 273 and only buying a couple weeklies on stocks that had high potential and then using next weeks options to get long anything that might be little slower to move (the thinking was an end of the week rally that would continue into next week). This ended up being a huge week for us because of how we strategized knowing 273 would likely keep things choppy much of the week. So again, if you struggled last week in the early chop I suggest you go back and read last weeks SPY open interest information or come join us.

If you have not yet subscribed to my weekly freebie you can do so below to get next weeks free trade idea sent to your mailbox Monday morning. Last week was BIDU and it was a big winner. In SassyOptions premium where it’s not just a trade idea, but comes with real time alerts we took BIDU calls from $1.45 to a high of to $4.50 and then another batch from $0.97 to $3.15 (and we actually left money on the table) . The stats for the weekly freebie since I began sending them are as follows:

  • 8 wins (I only count wins when they are big wins).
  • 1 that didn’t trigger
  • 3 scratch trades
  • 1 loss

Promotional stuff: If you are a short term trader and under performing or finding yourself on the wrong side of the market join us at SassyOptions Premium or you are definitely missing out. Still over 9 months left to make 2018 amazing. 

  •  Full premium service includes all day commentary, open interest and technical analysis on ‘in-play’ momentum stocks, and real time trade alerts through my exact entries and exists (meaning I can’t hide behind vague alerts without telling you what price I paid or sold at).
  •  Weekly Open Interest and Strategy Post – Open interest and technical analysis for how to trade AAPL, AMZN, BABA, FB, GS, GOOGL, NFLX, TSLA for this coming week. This does not include my private twitter, exact trades or any other updates.

Open Interest: If you want more information on how to read the high calls and puts in the open interest see here.

SPY-M: (1 of 2 for pins since Monday expiration inception).*The best pin for Monday expiration is around 278. Price closed above there on Friday and if price gaps over 279 or quickly gets over that level Monday morning then it will face some resistance at 280. However a gap over 280 or move over it and there is no call resistance till 282. To the downside there is support at 277 and 276. Given the strength of the market on Friday, should price open at or under those levels it offers a place to go long. 

SPY-W: (57 of 78 pins since Wednesday expiration inception).* There isn’t much to see in Wednesday’s open interest as long as price remains above 274. Under 274 and there is put support at 272 (a place to go long if we got there). There is some small call resistance at 278 and 282, but they currently are not high enough to prevent price from getting through them. 

SPY-F: (45 of 71 pins since I began tracking Friday’s).* Because this is a monthly open interest this graph likely won’t change much throughout the week. The strikes that stick out are the high 270 puts, the 275 puts and calls and the high 280 and 285 calls. Unless price gravitates back toward 275 again, then that strike and the 270 strike are likely not relevant. The relevant strikes therefore are 280, where SPY will face resistance and then 285. Should SPY get through and hold over the 280 calls then it is demonstrating a lot of strength and not something you want to fight, but instead you want to go with. The potential target could be lucrative at 285.

Pinning Stuff:

*An explanation as to how I define range pinning can be found here. More information about what pinning is can be found under the education section of my site.

Monday 3/05: Successful pin as I wrote last week that the 270 and 271 were mostly irrelevant. 

Wednesday 3/07: Successful pin.

Friday 3/09: Failed pin to the upside.

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