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So far, so good . . .

In the first week of 2012, my new options hedging strategy has produced a raw (not adjusted for commissions) profit of $468, with only 10 minutes spent at the keyboard.

The S&P 500 was at 1280 last Friday when I sold three 128 weekly option spreads for $2.28 net each. This Friday the index had only risen to 1284, causing the weeklies to decay to $0.72 each — leading to a good profit.

And there wasn’t much erosion in the April spread I bought to hedge.

So, all in all, a successful start. We will see how this holds up in more tumultuous markets that we all know are coming sooner or later.

I put the same trade on again for next week, selling three 128 spreads on the January contract for a credit of $2.29 each. Volatility is low!

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