Oh i just want to add that i was very frustrated when VIX was 35 and ES was around 1380 because I was dying to write more ratio spreads but had no margin to do so!! That was the best time to writes spreads just when everyone was running scared. I coud have got $10 to $13 for ratio spreads which I was gettin $2 - $4 before the recent scare started.
Do you know anybody's Credit Spread got hit ?
- Thread starter WD40
- Start date
when er2 was touching 745 and i had shorts at 720 which were 120 pts otm when i put these on a few weeks previous(with the plan of buying the longs above shortly thereafter), i was feeling pain. the net liquidation value sucked. watching er2 drop 20 and 30 points at a time, i had to make a move. usually i had longs above the shorts, but not this time. perfect storm... again, what caused the dd was buying back, rolling down and buying longs. i turned a short vol book into a long vol book.somehow i had picked up short calls that were soon closed that made the account look a lot better.
apparently, i trade very similar to you. debits, ratio's , etc. i trade with overnight #'s because that is all that matters if you carry overnight, think about it....
i am currently working half speed to get the account up. i will tread lightly for now.
Thanks for yr reply. So your liquidation value didn't look too crash hot either ha ha. I remember a year or two back when Coach was saying that ballooning crerdit spreads always never looks good when the underlying is approaching your shorts. I guess its the same whether it credit spreads or ratio spreads.
Think I'll buy some more PUT hedges today with this recent upmove in the market and give me more safety buffer. These hedges are not money down the drain and i usually offset them with a week or two to expiry as my ratio spreads are relatively safe by then. I get good money for them depending on where ES is. I'm still doing well despite the recent downturn. No drawdown despite the ugly liquidation value two weeks ago.
Im also leaning towards Christmas Trees now (endorsed by Mav and atticus). Been analysing them and they're even safer + I add my usual debit spread hedges. So they should be extra safe. I differ from you in that I don't do CALL spreads as i feel i cant go out far enough and the value gets big really quickly as ES approaches. Will start doing Calls though. So my money is only made from the PUT side. I feel i sometimes my risk is quite high because I only do PUT spreads even after ES moves up, and am vulnerable to substantial falls. But i manage my position sizing depending on where ES is. Which is why I would have loved to have had free margin when VIX was at 35.
MTE, thanks for the link and will have a look. So even you think its hard to explain. Was hopin there was a simple formula that calcs it.
Domestic, keep up your interesting posts. Always love reading you and people like dagnyt's real life trading action.
Cheers
ps I would post my real life trading action too but dont think anyone will be interested. Plus im too lazy to post regularly
Think I'll buy some more PUT hedges today with this recent upmove in the market and give me more safety buffer. These hedges are not money down the drain and i usually offset them with a week or two to expiry as my ratio spreads are relatively safe by then. I get good money for them depending on where ES is. I'm still doing well despite the recent downturn. No drawdown despite the ugly liquidation value two weeks ago.
Im also leaning towards Christmas Trees now (endorsed by Mav and atticus). Been analysing them and they're even safer + I add my usual debit spread hedges. So they should be extra safe. I differ from you in that I don't do CALL spreads as i feel i cant go out far enough and the value gets big really quickly as ES approaches. Will start doing Calls though. So my money is only made from the PUT side. I feel i sometimes my risk is quite high because I only do PUT spreads even after ES moves up, and am vulnerable to substantial falls. But i manage my position sizing depending on where ES is. Which is why I would have loved to have had free margin when VIX was at 35.
MTE, thanks for the link and will have a look. So even you think its hard to explain. Was hopin there was a simple formula that calcs it.
Domestic, keep up your interesting posts. Always love reading you and people like dagnyt's real life trading action.
Cheers
ps I would post my real life trading action too but dont think anyone will be interested. Plus im too lazy to post regularly