Week long trades have a weekly time limit and the Long DEC 31 2019 Put @ $1.69 was originally meant to be closed today. We have over 1 month left on the contract and we are extending the time limit of this trade due to us being slightly early and not violating the “1 Month Rule” where an option contract will not be held with less than 1 month time value remaining.
The contract closed today at $1.10 ($110) with 39 days left on the contact. We will close before Nov 29, remembering that Friday is a half day for trading and the market is closed on Thursday for Thanksgiving. Without calculating for acceleration in Theta decay as expiration approaches, we expect the contract will lose .028 or $2.8 per day.
We will hold the contract no later than Nov 29 – approximately $17 in time decay. We expect the contract to increase $50 for every 10 points SPY drops. For example, if SPY drops from 311 (current) to 307, we would look for a $200 increase in contract price, which would bring the contract price to $310.
We will look to next week for more action where we will meet before Thanksgiving. Have a good weekend!