SPX Weekly Bear Call Spread Analysis

I’ve seen several trades using RUT options to initiate out of the money credit spreads as of late. However, I just came across a pretty interesting one using SPX options. There was a seller of SPX Mar 27th 2140 Calls at 0.35 who also purchased the SPX Mar 27th 2150 Calls at 0.15 for a net credit of 0.20. As long as the S&P 500 is not over 2140 on the close this coming Friday the credit of 0.20 will result in a profit. The payoff diagram below shows the risk – reward of this trade along with yesterday’s closing SPX level.

SPX PO

There’s something else that is worth mentioning about this SPX Mar 27th 2140 / 2150 Bear Call Spread. This was executed while most of us were sleeping or just before 3:00 am Chicago time during what we at CBOE refer to as the extended hours session (ETH).