Search results

"For example, one can sell the 1150/1165 put spread and purchase the 1190 E-mini puts still resulting in a significant net credit." -- Super post Phil. Too bad this is not a live forum. 1) What's the benefit of using the 1190 e-mini put as opposed to a 1190 SPY or SPX put. 2) Even...

Phil, "I am studying the use of futures and options on futures on the S&P as not only hedging tools but also to increase my returns." -- So am I. So far, I've found that using futures as a hedge is not good because your losses can grow to well beyond the amount you were trying to hedge...

"A down day does not change any of my previous risk management rules - adjustments only if the index moves within 15 points or so of my short strike. SPY hedges can be added at anytime..." -- yes your risk management rule about "do nothing until 15 points to short strike" is crystal clear and...

Phil, Hard move down today. I think there's going to be more of this for a number of different reasons. Anyway, the 1165/1175 put spread went negative today. When do we start worrying about it and taking some action -- buying SPY hedges, taking the spread off, adjusting, etc...?

I meant put on a new put spread on a down day like today, not close it out.

The 1165/1175 put spread that you (and I) put on a few days ago is now going for $0.65 (roughly 2/3 of what we got).

"I do not mind if the market moves towards my strikes, I just mind if the index enters my front yard at 15 points or so away from my strikes. At that point I decided whether to stand put and save the house or move." -- Great analogy! In the cases where the index has meandered to 15 points...

Phil, "If the SPX gets close to 1245, previous resistance, I may consider opening a call spread" -- do you generally wait for the index to bounce off of 1245 and head back down before you put on the credit spread? How do you avoid getting trapped in a breakout situation (where SPX hits 1245...

Phil, If you believe the market is very likely to move against you in the near future, do you ever prematurely exit a credit spread even if you are still far OTM, just to be safe?

The mid was $0.60 (according to the thinkorswim platform) when I posted it, at which time the SPX was 1231 or so. A couple of minutes later, the Fed announcement caused SPX to go to 1234 or so. Surprisingly, the spread price wnet to $0.90 instead of going down (IV?). Now with SPX back at...

Sorry -- that's what I meant -- the SEP 1165/1175 put spread for 0.95 cents credit, from 4 days ago is trading for $0.60 right now.

Phil, The bear put spread from a couple of days ago -- 1265/1275 at $1 (0.95 for you) is trading at $0.65 -- and that's only four days after it was put on. Under what circumstances would you take a profit like this off the table -- it's tempting.

Phil, How about looking at a SPX Sep bear call spread -- 1265/1270 for $1.10?

Phil, Thanks, that's very clear -- thinking of losses in terms of "profitable month units" is a good way to look at it. If one had 3 losing months per year, and a losing month wiped out 2 months of profit, then the net result would be 12-(2*3)=5 to 6 profitable months for that year. (Strictly...

Phil, There are other (I know at least 3) entities who trade by selling deep OTM spreads for around 5% return/month -- very similar to what is working so well for you. Yet they publish their annual returns as being in the 20% to 25% range. I would have expected 40% to 50%. I'm struggling to...

Phil, What was your thought process in choosing 1165/1175 instead of 1160/1175?

ryank -- SPX. At one point the mid was up to $1.20.

Just got filled at $1

Phil/ryank -- thanks, makes sense (as long as it's not the start of a downturn, but that's what support/resistance is for). Just for fun, I looked for a spread on the OEX that is equivalent to the SPX 1265/1275. Works out to be 535/545 -- both trades have 93% probablity. It's going for $0.75...

Phil, Please explain a bit about buying put spreads on down days and call spreads on up days -- it is a bit counter intuitive!