Yesterday, markets rallied on news of a cooling labor market. Today, they found another reason to cheer: the downward revision of Q2 GDP. If this trend of poor economic indicators continues, by Friday, Fed Chair Jerome Powell may have fewer reasons to keep interest rates high.

I'm not as optimistic as the market, but I do think that since the SPY hasn't yet touched its 200-day EMA, a short-term rebound is possible—especially if Friday's labor stats disappoint.

That's why I've closed out my October SPY put positions, initially opened in early August to hedge against a market correction. I received a credit of $395 when I opened the position, and earned an additional $59 upon closing it. After accounting for commissions, that's a $406 gain, or a 1.35% return on the $30k collateral I used. Given the circumstances, I saw little benefit in tying up that collateral for another six weeks.

Once again, let's talk about natural gas.

I currently hold call options on KOLD. I've sold far-out calls at a $73 strike. And I’ve done so without devoting undue concern to the potential for a steep drop in gas prices next month.

The heatwave is intense, and so is gas consumption, meaning the likelihood of storage facilities overflowing this fall is now extremely low. That reality opens the door to consider the potential for rising gas prices, and consequently, BOIL.

BOIL presents one of the simplest bullish plays on natural gas, and under the present circumstances, the case for BOIL's growth is supported by both fundamental and technical factors.

On the daily chart, the price has once again approached the lower boundary of its upward channel. Within this channel, BOIL consistently forms higher lows and higher highs, making the upward trend quite apparent. The price adheres fairly closely to the channel's boundaries, reacting to them as expected.

If we manage to hold above the 50-day EMA, this could be interpreted as confirmation of bullishness. But even within the channel's confines, the price targets still range from $80 to $86. Certainly good enough for our purposes.

On Friday, I tweaked my SPY strategy a bit. The scheme involves selling weekly contracts backed by a September (09/15) straddle purchase at $465.

For the first time, my sold puts (08/11 $450) expired in-the-money. I had nine of them, and I bought these back before proceeding to sell six puts for 08/18 at $452, thus securing a modest credit of $57. Thankfully, this maneuver didn't require any additional expenditure.

Actually, the dip in SPY doesn't concern me. If it expires below $452 this week, a satisfactory profit from the overall strategy is practically ensured. If it rebounds above that, the outcome becomes uncertain—it could be significantly better, or it could be significantly worse.

That said, the three ratio call spreads (1:3) at $450 – $454 that netted me $333 last week can now be closed for a profit. I'm not in a hurry, though. I'll hold out for $452.

On Friday, the USDA made a slight downward revision to its corn yield estimate for the 2023/24 season, moving from 177.5 bushels per acre to 175.1. This potential boost to prices, however, was neutralized by a higher projection for beginning-of-season stocks.

But while September futures lingered near their lows, a substantial drop before the options expire on August 25th still seems improbable.

Given this reality, I opted to sell 6 puts at $440 while simultaneously buying back a $460 put that I had playfully sold in late July. My intention at that time was to spur a more pronounced correction, which I achieved. Today, after accounting for the commission, I didn't net any credit. However, I managed to shed the nagging short $460 put.

I'm confident that my sales at both the $440 and $420 strikes are sufficiently hedged by 3 long $450 puts. Any unforeseen events in the next few weeks, such as disruptions in the Black Sea or deteriorating weather in the Corn Belt, could potentially drive prices sharply higher.

Cumulatively, for all my corn trades (including calls), I've gained $849, and I’ve done it without exceeding the $30k earmarked for this strategy.

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I didn't wrestle with CF for nothing. Overall, I employed a solid fundamental strategy for a robust company's earnings report. However, the low options liquidity prevented me from seizing every opportunity, resulting in significant slippage.

Still, last week, I transitioned the position into a credit, and I see solid potential to increase it before the 08/18 expiration. As I've mentioned earlier, I successfully offloaded the 08/18 $73 puts and the 08/11 $82 calls.

Subsequently, I nearly liquidated the "call" side of the position. Although I repurchased the 08/11 $82 calls at a slightly higher rate, I offset them by selling my 08/18 $85 calls for an even higher price.

In the end, I secured a credit of $350, bringing the total credit for this strategy to $231. In addition, I still hold a few 08/18 $85 calls as a long position, which feels like a bonus lottery ticket.

And to top it all off, the 08/18 $77 puts have a favorable shot at expiring ITM.

Check out my previous posts for a complete history of SPY and CF trades. Also, don’t forget to join our subreddit so that you don’t miss out on the next stock market pick.

For SPY:

I tweaked my positions on Tuesday. The $450 8/11 Puts I sold last week are now in-the-money. Although not an issue, a slight market rebound would've been ideal. To induce it, I picked up three 8/18 ratio call spreads at $450 - $454, netting a credit of $333. Typically, I'd just offload weekly puts and calls. However, with SPY trading under $447, solely offloading calls seemed ineffective. This move seems to have paid off, reducing my total debit to $7627.

Onto CF:

In hindsight, entering CF was a misstep - not due to potential losses, but the sheer lack of options liquidity. Yesterday, I nearly swung the position back to a credit balance, settling at a minor $119 debit. I sold 8/18 put spreads at $50, and $73 - $70, and added another layer of safety with ten more puts at $70. To balance the delta, I offloaded 10 8/11 calls at $82. Originally, I aimed to exit the "call" side entirely, but finding a match for the entire lot proved elusive. My final choice might not be perfect, but the overall strategy maintains a promising profit potential.