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[responsivevoice_button rate=”0.9″ pitch=”0.5″ volume=”0.8″ voice=”US English Female” buttontext=”Play”]Below are orders for two vertical spreads on SPY that I submitted yesterday:

When these orders were submitted, SPY ranged between 375 and 378. The P/L profiles for each of these orders is worth our attention:


Notice that the two spreads compliment one another. Look at what happens when we combine them. I’ll refer to the resulting complex trade as a box spread:

Both of the orders were filled later in the morning, and gave us a position that maintains a $27 profit line no matter what the price of the underlying is. We’ve done the same kind of trade early this week with SPX, which is cash settled. SPY, however, works like a standard American option, which is settled with shares in the SPY ETF. After market closes, we’ll take a look at how things worked out.
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