Sold SSO November 36 Naked Puts

I’m working to get a larger part of my account invested after all of my October options expired worthless last week.  One of the easiest ways I find to do that is the double the S&P 500 ETF, SSO.  I started pricing in my order before the markets opened today.  I figured I should aim for a 5% pull back in the S&P 500 (or SPY ETF) from the year to date highs as a good entry point.  With the VIX so low option premiums are low too so I talked myself into letting my cost if assigned the options be my goal instead of trying to get the strike price in that range. 

For SSO I’d have to go with a 10% drop for that to work for me since it’s a 2x ETF.  I found the $36 strike came close to meeting my goal as it would allow for an ~8% pull back in SSO for me to break even.  By this point the markets were open and SSO was down, so I decided to watch for a little bit to see how the first half hour traded.  The dip didn’t last long and I entered my order at $1.25, just five cents above the bid.  Instead of bouncing around and my order hitting SSO started to charge higher.  I reevaluated and decided that since I was only about 30% invested so far, I needed to get in with something, even if it wasn’t ideal for what I originally planned.  While SSO was trading at $37.08 I sold three SSO November 36 naked puts (SOJWJ) for $1.10 each and received $317.75 after commissions.

SSO has climbed some more since I made the trade, but I can’t help but being annoyed that I missed out on $30 by trying to make an extra $15.  Sometimes patience works and other times it doesn’t.  We have four and half weeks before I’ll know if this was the right move for sure.  I hate chasing trades, but sitting on the sidelines watching profits pass by can be even more annoying.  This pulls me up to ~44% invested or if you count my two 2x ETF trades as double the underlying value I’m closer to 65% invested now. 

Depending on how my current holdings play out the next few days I plan to continue building my positions each day or two.  I’m eyeing QLD now.  BA dropped like I said I thought it would, but I can’t bring myself to trade on it again yet.  The downside risk is probably reasonable, but I just haven’t gotten there yet.