Search results

Seems like you're on a roll with the hedges. May as well give up with the credit spreads! Wondering if you'd considered locking in the profit of the long hedges by rolling them up (selling the appropriate vertical) so you retain maximum upside potential in case you need it, instead of...

Andy, I see. If your focus is on total $ returned then I can see why this strategy might disappoint or not fit your criteria. I think you can find an optimal way of sizing the position and possibly pyramiding etc. to remedy that situation though. The goal being to get roughly the same amount...

Andy, You may have been slightly unfortunate with movement of the index in the last couple of months! Yes, the margin at risk can increase substantially depending on your adjustment but the question I have to ask is did you end up with a worse risk/reward ratio than if you had done a FOTM...

This is the crux of the argument. You must be sick of having to justify using SPX every 3 pages lol. It will be interesting to see if the FOTM premium remains when SPX trades on multiple exchanges.

Donna, Not an expert in this area, or indeed any area for that matter but I believe it was McMillan in his first edition of McMillan on options that first brought to my attention the activity of large abitrages and the effect they might have on the index during expiration week but more...

grrr... Waiting to get filled for half an hour and I'm more than 15 cents off the mid. What is wrong with this picture? Natural is .20 and Mid is .575. My order for .40 is just not getting filled. Admittedly only 20 lots but still that's just plain greedy. Not playing anymore. Momoney.

I think SET was the least of people's problems that particular month. The problem with credit spreads/ICs is that they often really only reveal their best profit potential as expiration nears. This is due to theta blah blah blah... So, the question becomes, when is the optimal time to take...

Agree, but alas for some people this is just not possible even with mobile access. Do we say to those people that they shouldn't be trading? It's a tricky one. I'll let you tell them :) Don't want to start an OX vs ToS debate, but the thinkAnywhere platform for PDAs kicks ass! See here...

Good explanation. I like the iron butterfly approach too depending on how sideways things are looking and then adjust or build from there into ICs or other positions as the market dictates. Otherwise, just take one side of the position if things are not so sideways. Again, concur with your...

Rdemyan, That's exactly right. Ratio more long legs than short. The ratio is dependent on what risk profile you are after and credit etc. The width of the spread can also impact quite substantially. One large caveat to this approach is that it probably wouldn't be feasible for FOTM credit...

Right, lost me on all of the above lol but I'm sure you know what you mean. Nice idea. Similar to contingent short futures idea. Is it practical and cost effective though? If you could build an intelligent ATS that was smart enough to detect a black swan event and then also smart enough...

Agree, risk management or "cheating the probabilities" as I like to call it can make the difference between success and failure but I think there are more subtle factors at play too....it's Sunday damnit! Just on the point of exposure time, this could be boiled down to an understanding of the...

Phil, It's Sunday so forgive me for being brief: Criteria for selecting products to trade (credit spreads or otherwise) are quite simple really: 1) Familiarity with the personality of the index (assuming we stick with index based products). This can be a bit of chicken/egg. 2) Good...

Rdemyan, You mean people actually read my posts? LOL. I've tried to disguise my vendetta against the SPX market makers but obviously haven't done a very good job. For credit spreads, diagonals etc. I do indeed trade the XEO. If it sounded like I was advocating not to do so, I just wanted...

Rdemyan, Yeah, what he said. :) Comparison based on relative percentages. You have a very small window of opportunity in my experience for establishing FOTM credit spreads on XEO if you are going to adopt a similar strategy to Phil's. On current volatility levels 40-35 days out seems...

Rdemyan, Agree that a central location for positions etc. would be a good idea. Better still if they made these forums more specifically for trading journals. Do they allow sticky posts? Perhaps one post e.g. the very first one could be continually updated with the attachment of current...

LOL. Again, this is priced into the options accordingly. Momoney.

Ryan, A few basics to get you started: Pros - Electronically traded - including electronic cancels. SPX did not have this last time I checked. - Fairly tight b/a (allegedly as tight as OEX but will not neccessarily show this on your screen). XEO has lower open interest than OEX but...

LOL. I'm inclined to agree with your analogy but perhaps not in quite so strong terms. It does perplex me a little when people seem to be unaware of some of the fundamental aspects of what they are trading, like whether it is European or American exercise, what time the products trade, what...

Parisd, I'm sorry, but I have to disagree with your assertion. SET risk has in fact been covered ad nauseum on this thread in the past. I hope that you did not lose out. Momoney.