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I described what I did few posts ago: Few weeks ago I sold RUT Jan 650/660 bear call spread for $1.25 credit. RUT was at 598. My plan was to sell OOM bull call spread on pullback. That pullback never came, and when RUT reached 640 few days ago, I was facing a dilemma. The 650/660 was worth...

Margin requirements for iron condor are actually lower than for naked options. If you sell RUT IC for $2.5 credit, your margin requirement is $750. If both spreads expire worthless, your return on margin is 33%. Probability of such return is pretty high (65-80%). Of course the trick is not to...

It’s pretty simple. When you sell a credit spread (650/660 call for example), you are short 650 call and long 660 call. Since 650 call is more expensive, you get a credit. After time passes and RUT is below and far enough from the short strike (650), the value of the spread shrinks. When it...

That makes sense, but why is it different in SPY options? If you look at SPY options, the spread is also getting wider if you go further from the ATM strike. For example, SPY feb calls look like this: 114 (ATM) - 2.68/2.70 112 (ITM) - 4.0/4.1 (that's 2.5% between bid and ask) SPX calls...

I understand that ES option multiplier is 50, correct? So I would need twice as many contracts compared to SPX. Since it is direct routing, the commissions are $1.81 compared to $0.7 for SPY or SPX. If ATM calendar spread is around $10, to invest $1,000 I would have a choice of: 10 SPY...

Okay, here is an example of butterfly: Few weeks ago I sold RUT Jan 650/660 bear call spread for $1.25 credit. RUT was at 598. My plan was to sell OOM bull call spread on pullback. That pullback never came, and when RUT reached 640 few days ago, I was facing a dilemma. The 650/660 was worth...

So basically trading those spreads is similar to RUT or SPX? You prefer them for better liquidity? One technical question: in IB, ES pop-up window gives three choices for Combinations: Futures Spreads (SMART), Futures Spreads (Directed) and Future Option Combos (Directed). Which one do you...

How do you track those trades? I'm using MSNStockQuote in excel for tracking, but I wasn't able to find those options in MSN Money.

How did you get the screen that you attached? Thanks again for your help.

I noticed that there are options expiring every week - which ones do you usually choose? What fills are you getting - buying spread that has 10.0/11.0 bid/ask, what is a realistic fill?

This is very interesting. Could you please give some more details? What kind of trades (calendars?), maybe some examples?

I never traded them, but it might be not a bad idea. Can someone explain how they work? What about liquidity and slippage?

I did some quick checking comparing SPY and SPX using feb/mar 113 call calendar. The following bid/ask data was available when I was doing the calculations: SPX feb 1130 call – 25.7/27.0 SPX mar 1130 call - 35.2/37.0 SPY feb 113 call – 2.86/2.87 SPY mar 113 call – 3.80/3.90 SPX 1130...

14% is an average return on margin for iron condor trades. An average trade is around 5-7 weeks. It includes 10 trades, 8 winners and 2 losers.

I’m currently doing calendars on ETF and indexes. SPY calendars work pretty good, but they are very expensive commissions wise. Typical one month wide ATM calendar is about $1, and my profit target is 15%. With $0.7 per contract commission, I would pay $2.8 for round trade. That’s almost 20%...

I'm trading butterflys usually as a hedge and not standalone trade. I know that people trade GOOG butterflys and it works pretty well.

I my 6 years of trading, I personally had much more success in selling options than buying them. This is the only area that I was able consistently making money. My average return in iron condors for example is around 14%. I’m using a combination of put writing, iron condors, calendars and...

Please see this article - http://www.cxoadvisory.com/blog/external/blog4-23-09/ • Individual investors comprise the least successful group of index option traders. They take mostly long positions in calls and puts with time to maturity less than a month, and the average trade duration is...

This trade was a pure gambling. According to options software: Return if unchanged: -9.9% Probability of success: 45%. And like CandleStick77 mentioned, it’s too close to expiration, no time to fix. The result might turn out to be good, but it doesn’t matter.

http://www.cxoadvisory.com/blog/external/blog4-23-09/ This article basically confirms my claims: Individual investors comprise the least successful group of index option traders. They take mostly long positions in calls and puts with time to maturity less than a month, and the average...