This week I bought back into the S&P500 Index via 100 shares of SPY. I didn’t intend to get out of SPY in the first place, but my call option was exercised right before the ex-dividend date. [No soup for you!]
SPY is my second favorite ETF after VTI. VTI is slightly better in terms of having an ultra low expense ratio of 0.07% and broader exposure to the whole US stock market. SPY with its not too shabby 0.1% expense ratio is comprised of 500 large companies from the S&P 500 Index.
I dabble with SPY in my play money “crazy Ivan” account because it supports my buy-write strategy. I buy 100 shares of SPY and then write (sell) a covered call option. SPY has a very robust and liquid options market around it. This tends to keep the spreads low.
Another convenient feature of SPY is that it was constructed to be priced at about one tenth of the S&P 500 Index. Simply put if the index is at 888 then SPY would cost about $88.80 per share.
So far the CIA has been weathering the market storm pretty well. It closed Friday at $20,427. It is currently comprised of BCS, SPY, and cash.
As an aside: Wow what a ride on BCS. I rode it down to $3.07 and back up to Friday’s close of $18.64. That’s a 6x run up and a six-bagger as Peter Lynch might say for those smart or lucky enough to have bought at the $3.07 low.
$20,062. Essentially flat since early December. Holdings: $10.9K cash, $9.1K SPY, $800 BCS, -$640 SPY call.
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