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No problem. Started tracking the NOV P795/DEC P700 on Friday, October 17th. At the initial look, the NOV P795 sold for 25 and the DEC P700 cost 19.00; hence the credit of 6.00. In addition, the spread can make more money if the underlying, at the time of expiration, finishes at the NOV...

Thanks for the explanation. This supports the need for stop losses and profit-taking, as I noted above. It will be interesting to follow this trade and see how it performs vis a vis the Greeks and IV.

A couple things. Since I am basically net neutral long volatility, should I really care whether the IV increases or decreases during the 5-week expiration cycle--as long as the descent on the underlying is steady and not abrupt? Also, suppose I stagger my entries over several near-strikes...

You can do what many pros do: Buy high-div stock; sell a LEAP OTM--typically two strikes OTM. Theoretically, a stock like PM (Philip Morris) works great.

Food for thought. Why not look at short IC's and IB's (iron butterflies) that are vega neutral? For the IB, you would sell the put/call ATM for the near month, and your wings would be placed (longs of course) OTM in the far month. Make each wing vega neutral to its complement. Body of the...

Bump this discussion up for more input. I am not able to figure out what a reasonable profit would be on one spread (short strike was 25; long strike was 19, for a $6.00 credit. What is a reasonable stop loss for this trade given its potential? During the day, when is the best time to enter...

It's the prudent thing to do. If the banks did the same thing in 2003-2005, we wouldn't of had the financial crisis. Ironically, the margin increase is for your own good--it forces you to keep more liquid funds available. Hate to see you have to sell your house to cover a margin call, like in...

Logged into IB around 9:05 AM EST. Put up the ES chart of 1-day, 5 minute intervals. The previous day's chart came into view. At around 9:33AM, the chart reloaded and the current day's chart began to form. Just now, I put up an ES chart with different parameters, and all of the candlesticks...

I appreciate everyone's comments. I have a couple of additional questions for the group. 1. What would be a reasonable stop-loss for the above trade? 2. What is a reasonable expected profit for the above trade? 3. When would you enter a diagonal calendar put spread for a credit vs a...

I have some questions about this strategy that I have looked at extensively. I have a trade: DEC08 ES is the underlying; Short NOV08 795P; Long DEC08 700P. Net credit was 6.00. The greeks: Vega-Neutral; Theta +4010; Gamma -0006. As I compare this spread with a short, naked NOV08 795P, I...

I have noticed something unusual with my charts. I trade the ES. When I create a chart--usually one day, 5 minute intervals--after 9:30 AM EST, the intervals between the time of chart creation and 9:30 AM EST are missing. In other words, if I logon and create a chart at 10:00AM EST, the...

Two ways--one, IB calculates fair vale of the option. So, I have pllced limit orders for the fair value, and they get executed. Also, if you place a limit order halfway between the bid/ask, it gets filled. Since I have used IB, the ITM options get closed out without a problem. Is it because...

1. What time of day to do enter your option trades? I have been wondering whether it really makes a difference. I have looked at the open (9:30AM). I have looked at mainly 10:00AM, 10:30AM, 11:00 AM, lunchtime (12-1PM), 4:00PM, and since I trade ES FOP, the time between 4-4:15 (All times...

For September and the other quarterlies, the options expire on Friday at the open. A special opening quote is published and all ES futures and options are settled based on that special opening quote. The last day of trading the ES futures is Thursday at 4:15PM. A lot of things can happen...

Market makers are smart. I trade FOP on the ES. Spreads are such that the market value of an option lies about in the middle of the bid/ask spread. And believe me, the spreads are wider than I like. I have noticed that if a small trader places a small (1-5 contracts) limit bid inside the...

This topic has interested me for a while. I know people--myself included--that trade far fewer days and make far fewer trades, and make a great deal of money and do this on a full-time basis with no other personal source of income. Even though a multitude of trades aren't executed on a daily...

CTA is an NFA/CFTC designation as is a CPO. A CTA basically is a fund manager, either by giving advice to people with their own accounts or to pools. A CPO basically creates the pools; in other words, a CPO gathers the money and a CTA manages it. One person/entity can be a CTA and a CPO.

Got it. Interestingly, the odds prior to placing IC's doesn't really matter either. Most of the really good IC traders I know place their short strikes above and below major resistance/support. Odds of all options expiring really is irrelevent--they do not hold these positions to expiration...

The underlying will touch your short strikes very often. What is important is what you do when that happens. Panic by closing the IC? Close the losing spread? Close the winning spread? Add another IC? Do nothing? Once the IC is placed, it is all about management; the odds of events...

I like to use BB bands to give me an idea of the "range of trading" of the current underlying (stock, index, etc). I like to use the RSI index to indicate trend. I like to use the slow stochastic to look at overbought/oversold situations. I also keep my eye on the VIX for relative volatility...