Post #1485 by rayvt on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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I got the XSP Mar'25 300 call for 213.15 when bid = 210.95 and ask = 214.51, for a spread of 3.56. XSP was 501.17. FWIW, today the spread is 1.48.

That was 62% into the spread, just a little above the midpoint of 212.75. 3/4 of the spread was 213.60
I moved up my limit by 5 & 10 cents as a time, starting at 25% of the spread (211.85), waiting about 30 seconds at each step until it got filled. When they like your price it fills immediately.

The effective interest rate was 3.80%. Breakeven is 513.15.

The "extra" comes to 2.19%/yr. Indeed more than 1%/yr.

I think I mentioned earlier that I like calls on XSP better than SPY because of the English expiration, cash settled, and no fiddling for dividends.

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