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Coach: You adjusted down to the 1165 short strike and held on yesterday even though I think the SPX low was around 1168-1169. You've certainly got bigger ones than I do, but you've been right twice. :) What led you not to adjust yesterday.

Point taken. I was only thinking of premium taken in, but you make a good point. On the other hand, our mantra is to manage risk which means that we would never allow a complete loss and would adjust before the short strike is breached (unless there is a major catastrophe where there is no...

I just called the OIC and requested that the following strikes be added for November: 1120 1115 1110 I was informed that if they are added, it probably wouldn't occur until Monday. We'll see, but thanks for the information.

Yes, this lack of November strike prices is most annoying. I'm actually considering the 25 point spreads, because there may be some decent premium; that is premium relative to the 25 point spread. Am I correct on this coach? It seems to me there isn't any difference in getting $1 for 10...

Well, I'm nervous about my position as well and had to adjust today. Unfortunately, I did not get a good fill on the newly purchased bull put because of the volatility. As usual, once you close a bull put to adjust, the market turns around and heads back up reducing what you'd hope to get...

I usually have CNBC on before the market opens. They talk about where the futures stand relative to "fair value". If below fair value, then they anticipate a lower opening and vice versa. What is fair value and how is it determined.

Exactly my point. When near expiration you can realistically only roll down 5 to 10 points. Depending on the market conditions, is this enough or will you wind up continuing to roll down every day or other day another measly 5 points losing money all the way down and maintaining a consistent...

Coach: You made the adjustment, but I'm wondering, is there a technical support level that makes you think the SPX won't go below 1165, now that it has breached 1180. The next support level below 1180 that the guys I follow talk about is around 1140. If there isn't a support level between...

Coach: Why do you say you think the 119/118 bear put is inferior to the 118 put. As you point out the 119/118 has a higher probability of being in the money and the net debit is half that of the 118 put. The only reason I can think of, of why you came to this conclusion is that you expect...

Thanks for that information! I was primarily referring to bear calls that were put on before a crash, so these would be in very good shape. However, no doubt I would be tempted to put on additional bear calls during the crash and your point is well taken.

Thanks, Coach. I've come to the conclusion as well that a loss is inevitable and the goal then becomes to mitigate that loss as best as possible. I suspect bear calls will probably have low premiums whereas the IV on the puts would be very high. 50 to 100 points seems high, but just last...

Coach: I'd like to discuss a hypothetical event and hope that you will go through the general strategy you would use to deal with the event. Of course there would be decisions you would make based on specific option prices, but if I could just get a feel for how you might respond. Event...

Trader: I want to make sure I'm clear on this. Trading the futures market gives you access to the S&P futures outside normal Wall Street trading hours, so you could trade the London bombing in the example you mentioned. Is this the only advantage of trading the futures over the SPX...

Followup to my post below. A couple of days ago I closed out the 1285 short leg on my Oct SPX 1285/1300 bear call spread. I was able to buy that leg back for $0.05. After the fill I placed a GTC order to sell the 1300 leg for $0.05, hoping to get lucky. Got it filled today. So I was able...

You must have been fighting me to get that filled. I had the exact same order, but here's the strange part. I had the order in for a $0.35 credit for well over an hour. The SPX was up about 3 to 3.5. I then changed it to $0.30 and got filled in 2 minutes. SPX was still up between 3 to...

Trader: I'm very interested in knowing what your plan is for a terrorist attack. Now that I too have "more experience" I feel like I can handle most adjustment requirements. The one that concerns me is a terrorist attack with a dirty bomb or, God forbid, the real thing. Seems like a 100...

You say you had the order screens up and were looking at prices. Am I correct in assuming you would have placed a limit order. Also, would you have bought SPY puts or spreads as well or just adjusted your existing SPX position (both the bull put and bear call). When I had my debacle...

Thanks, Coach. I'd like to explore this a little further. Having "been there" myself (and by that I mean ATM and ITM), I'm curious as to how your decision to hold on (as you said it took "balls") was affected by the fact that you already had a SPY hedge on. I know that you can only use the...

Coach, thanks for detailing your plan, but.... I know you typically use 15 points between the SPX price and your short strike as a point to at least start considering adjusting. So when the SPX was down below 1185 (I think it may have gotten as low as 1182 or so), I don't understand why...

Coach: As I understand it, you have an Oct 1165/1175 bull put spread. I'm curious to know if you adjusted that position?