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"For now 1200 still looks like a good support point but just in case we break 1200 I wanted a small hedge and possible way to profit from the dip even if my 1175 short strike seems safe. Today I bought 30 OCT SPY 120/117/114 Put Butterflies @ $0.45" -- Phil, couple of questions: 1) Why...

"If I only had $100k I would put it all in closed-end funds earning interest. That is my style so not everyone would agree. This way I could only sell up to 50% of acount in spreads and boost my return. The CEFs would provide about 7 - 10% when capital appreciation is factored in (got to...

"So my investments were already in closed-end funds and cash before I started selling the spreads." -- Phil, couple of questions: 1) Let's say a $100k tradeable account. How would you divide that up? Say $80k in tbills/funds of which you use $40k as margin for spreads, remaining $20k in...

The strategy Phil coaches on this board is a rather sophisticated way of trading -- maybe not for the floor trader, but certainly for the part-time retail investors (like me). I'm curious about the experience and age group of the readers/practitioners on this board. I wonder if any of you...

Phil, Can you please offer some insight into: 1) what you do with the other 50% of your funds (I think you said you only write spreads on 50% of the total account)? 2) What you do with the margin for the spreads? I recall you might have mentioned that you put them in t-bills? How does...

Phil, Last two days have been great for put spreads. Of course, assumption here is that we're not at the start of a market plunge. What SPX put spreads have you put on? I have some 1160/1170 @ 0.70 yesterday and am looking to add the same today. 1170/1180 will get you more than $1.00...

"For OCT I am looking at OCT 540/550 Put Spreads and for SPX 1170/1180 Put Spreads." -- Phil, what was the rationale behind looking at the XEO instead of focusing only on SPX?

Ryan, Your link is quite eye opening. The gaps have not been as large as I imagined. Nevertheless, a modern day event such as 9/11 can cause a 5% gap (around 60 points). If it a) happened near expiration and b) the index was already close to the short put strike and c) there was a huge...

Phil, When you choose the strikes, I know you look at support, resistance, trend lines,.... all the TA stuff. But do you also look at probability (other than the short strike deltas) in the way it's used on the TOS platform (prob cones, prob of touching, prob of expiring, all based on current...

SmilingSynic, I think Phil has a valid point. If you're warning readers that a black swan can end a trading career after years of profitability then suggest a constructive risk mitigation plan (simultaneous spreads on currency, index, soybeans, corn, and energy for diversification?) instead...

The SPX closed today at 1227.73, but the opening price tomorrow is the settlement price. I've heard that the SPX can open on settlement day at a price quite different than the sum of the 500 components that constitute the SPX... i.e. the market maker is doing his thing. Question: is it...

Dr. OK, this is eye opening. (BTW, I know Phil's approach is never to be in a situation where the index and the short strike become close neighbors, but it happens as you've pointed out...) So you're saying that because SPX is a monopoly the market maker will widen the bid/ask spread as a...

Dr. Let's say the example you gave is for SPX. Now let's try that same setup with SPY (1/10 of SPX). $0.40 on each side, total credit of $80k, but now it's 10,000 all around for the IC. So, commissions would be 10x that of SPX, which is 40k (at $1 each). Think the brokerages might not...

Dr. Zhivodka, You're absolutley right -- buying SPX from the man stinks because he has a monopoly... but I do it anyway. Why? Well, try putting a few hundred big ones to work on a SPY IC -- the commissions will eclipse everything else.

Phil, Great job managing risk on Friday. You wrote "The market maker is making money on every single trade I do from the bid/ask no matter what I do." I've been comparing naked puts/calls (i.e. selling a strangle) to selling an iron condor and your comment is one of several reasons...

I was under the impression that getting filled on the SPX at a dime below the MID works. But it is not working for me... anyone have any thoughts on this? (I use thinkorswim).

Coach Phil, What are your thoughts on using 15 point spreads instead of the usual 10?

Nickles and Dimes a Thousand Times!!! :D

Phil, I've been exploring something interesting and wondered if you have considered this as well. Instead of ICs with 30 or 45 days to expiration, how about 90 to 100 days to expiration? The strikes can be further OTM because of the higher premium. And you can put one on each month. After...

Phil, When its so close to expiration each day's theta decay is significant. How does theta decay accrue on our positions. I think it only accrues during market hours and not after-hours and not on weekends? Say a large iron condor has a current theta of -$1000. Does that $1000 get...