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October shows a massive swing in my trading profits.  The volatility in the SPX over the last 45 days hit an exception to my 7% threshold for moves. 

In late September, I placed call spreads on the SPX that were 6% out of the money.  Generally, within my strategy, especially with the short time left to expire.  I made decent profits on puts that I placed in August and did not anticipate such a strong move higher in the SPX.  I also made almost $6,000 on long ES Futures.

In order to maintain my positions, I rolled October spreads to November.  October was a long month and SPX high a 4 year record for increase (9% higher in a single month). 

My target price for SPX is 1990 on my most aggressive credit spread…that’s a 4% drop in current SPX price.  I’ll continue to roll spreads forward until SPX gets back into my range.  At the same time, I’ll sell SPX put spreads to increase cash position to support the cost of rolling my call spreads.    

This could be a setback or a fortunate escape which adds another few thousand to the gains I have for 2015.

Since hindsight is 20/20, here’s the change I would make in future.  I will not put call spreads in within my normal target when the market is recovering from significant drop.  The rush to sell is frequently followed by a rush to buy.

Stay tuned for more updates through the remainder of the quarter.