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Position Building: Week 3
Week 1 | Week 2Since the last time we addressed our SPY position, there was an opportunity to roll the short, January 08 calls out to February. In doing this, a credit of $182 was generated. This reduced our initial investment from $1,083 to $901. As such, we have $9,099 of our $10K earning interest in a money market.
Since rolling the contract out to February, the market has fallen further and the calendar spread is worth $822. We therefore have a $79 open loss on a $901 option trade.
The spread loss and the interest gains to date are reflected in the portfolio value number below. The portfolio is down about 0.46% as of now.
Principal: $10,000 |---| Position Value: $822 |---| Portfolio Value: $9,954
To summarize, it stands that we could lose $901 on the option trade, but make about $400 from interest over the course of a year. With that, after one year, we could expect to be down about $500 in the worst-case scenario. The worst case should be fairly easy to avoid. Tune in next week.
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Position Building: Week 3 
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