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I expect cash price to be above 120 in August. Current cash price is 117. Difference between cash price and future price is too large in my opinion for only 6 weeks to go for the August contract.
But I tried to be cute and didn't hit the ask when buying out of shorts. Got filled on some but not the rest. Took a hit because it never came back.
I have decided it is better to hit the bid or ask for ES options and miss out on 0.05 than risk having partial fills and then having price move away from you. As long as bid/ask is reasonable.
Yes still using 50% drop. With futures dropping this morning I wanted to exit before it dropped more and before weekend.
I still have on one more set of spreads (15). 1700-1600.
I am not sure when to reload. My gut tells me there should be a drop next week after July option expiration today. That is what seasonals say.
Last year ES was up 3 on Monday after option expiration then dropped 57 the next 5 trading days. 2013 & 2014 were flat. 2012 had a short 2 day 28 point dip.
So I'm thinking a couple of days dip next week then I add more.
I proceed similarly. Currently I hold an ES strangle, and I intend to add a short put position at 2120 - 2130. At this level I also intend to buy back the calls.