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Increased volatility during August helped propel my monthly revenue. I continued with the SPX Credit Spread strategy, following the guidelines I have outlined, earning $7,660. Using that strategy, I have a large number of put credit spreads in play that will close in September.

I gained significant benefit from out of the money puts I had purchased in several lots while the market was high. Here are specifics: SPX 1800 PUT with January 2016 expiration. My break even (based on purchasing 2 contracts in February 2015, 1 in March 2015, and 1 in April 2015) was $54. On August 24, the morning of the huge downturn in the market, I moved my limit order (to sell) several times as I saw the futures dip lower. At 9:30 EST, my order filled at $100 and I booked significant gains of $18,454 that morning.

Why did I purchase out of the money puts? I got burned last year by changing strategy the day before the September/October drops in the stock market. This year, although I have been executing on my strategy, I wanted to get some additional downside exposure to the market, preparing for the day when the SPX would get into the 1800’s. For once, the strategy worked.

To the extent I would not have sold the puts at a profit, they would have eventually expired as worthless in January 2016. In one sense, it was an insurance policy. In another sense, it was a downside bet that I could have lost.

While I have a majority of my holdings focused on the SPX Credit Spread strategy, I maintain smaller quantity holdings in USO, WMIH, EAPH, etc.

September shows promise as a record month with most of my earnings coming from the SPX Credit Spread strategy. However, my positions have been challenged by the decline in the SPX…too close for comfort. I may have to execute on a rolling strategy into October if my positions are near the money during expiration week.