We hold 32 September 140-135 put spreads 1:1 with a cost basis of 0.11.  To completely eliminate risk from this position, which cost us $352, I’ve suggested selling half of the spreads for 0.33.  In fact, we can cover our entire outlay plus an assumed commission of $50 by closing out 16 of the spreads for just $25 apiece.

This modification is timely, since the spread closed yesterday on a bid/asked of  0.19/0.28.  That means you may be able to get the order filled for 0.25 by simply offering it at an in-between price. However, if DIA continues to sink — even furtively, as has been occurring — it should be easy to close out half the position for 0.25 today or tomorrow.  The remainder of what we will hold would give us a shot at an $8,000 profit, although that would require a 1500-point drop in the DJIA between now and September 20. Realistically speaking, we stand an excellent chance of quintupling our stake or better even if stocks merely continue to drift lower rather than plummet..

FYI, here’s an observation concerning stealth selling that I posted in the chatroom during yesterday’s constipated session: “The stock market still looks like not-so-sly Distribution: shake out all the sellers on the opening bar so that DaBoyz can run stocks up as high as possible; then, fade to black. The run-up piece of this ruse has not been getting much mileage lately, but with the right ‘news,’ three days of drifting lower can easily be recouped in under five minutes.” ______ UPDATE (August 21, 4:30 p.m.): With the collapse, as anticipated, of today’s fraudulent Fed-‘news’ rally, the spread is going nicely our way.  It was 0.27 bid at the close, so I’ll assume everyone was able to exit half of the position for at least 0.25 as suggested. That means that the 16 spreads that remain are virtually cost-free to us and that our theoretical profit will be equal to their value.  Currently offered at 0.37, a sale at that price would yield a gain so far of $592 after commissions. We’ll let it run!