Intermediate Trade: SPY

We just had a blowout jobs report, with stocks stuck around $247.43 on the S&P 500 Index (SPY) . While I believe in the law of big numbers when it comes to stock indexes, the $250/2,500 mark has been a tough barrier lately. The tech rally that has led the way is starting to run out of gas, too. Today, banks have bailed out the indexes but short term it feels we are running out of reasons to keep going up. We've seen great earnings for the most part, but the dog days of summer are coming.

The other big thing is the low volatility. Put spreads can be had in the SPY for near-historic low levels. A five-point-wide put spread in SPY for next week costs just $0.43. That is only $0.08 a day in decay, so even a small pullback should make the put spread profitable. Implied volatility is down today, so you get the weekend hold for very little. I like SPY put spreads here, very close to the money....38 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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