Getting Orders filled with big spreads

C

cowtowner

Been trying to put on an SPX iron condor, but the spreads are HUGE.

I've tried placing limit orders in the middle and slowly (.05) intervals towards the bid, but it seems that in order to get one filled it won't be worth the risk/reward.

I'm doing as suggested in another thread, trading 1,2 or 3 lot spreads to help my learning curve, I've also watched every Dan Sheridan video on CBOE, and love his style. Will probably attend one of his seminars in Chicago this summer.

But, order execution seems to be the key to making these Condors work, and just wanted some advice to a new guy trying not to blow out my account.
 
Try calling the floor. SPX still trades the bulk of it's volume open outcry. (particularly spreads)
Quote from cowtowner:

Been trying to put on an SPX iron condor, but the spreads are HUGE.

I've tried placing limit orders in the middle and slowly (.05) intervals towards the bid, but it seems that in order to get one filled it won't be worth the risk/reward.

I'm doing as suggested in another thread, trading 1,2 or 3 lot spreads to help my learning curve, I've also watched every Dan Sheridan video on CBOE, and love his style. Will probably attend one of his seminars in Chicago this summer.

But, order execution seems to be the key to making these Condors work, and just wanted some advice to a new guy trying not to blow out my account.
More...
 
Quote from cowtowner:

Been trying to put on an SPX iron condor, but the spreads are HUGE.

I've tried placing limit orders in the middle and slowly (.05) intervals towards the bid, but it seems that in order to get one filled it won't be worth the risk/reward.

I'm doing as suggested in another thread, trading 1,2 or 3 lot spreads to help my learning curve, I've also watched every Dan Sheridan video on CBOE, and love his style. Will probably attend one of his seminars in Chicago this summer.

But, order execution seems to be the key to making these Condors work, and just wanted some advice to a new guy trying not to blow out my account.
More...

execution is a problem with the SPX and a one lot Charlie does have a hard time getting filled. If your trying to understand condors you might use the spy. It is problematic that you can't go as far out of the money as the premium dries up but you will get a 10 lot fill very quickly at mid. The other way is to price it using spy then throw your SPX bid out there. You may get lucky...just don't chase the bid too far. Try again the next day.
 
I'll try the SPY angle....one reason I was trying to stay away from 10 lot (or more) Condors on SPY was simply the cost of commission angle, but I definately see your point as far as getting a 3 lot Condor filled.

I'll give SPY a try, as basically it's for education purposes for the next few months.
 
Quote from cowtowner:

Been trying to put on an SPX iron condor, but the spreads are HUGE.

I've tried placing limit orders in the middle and slowly (.05) intervals towards the bid, but it seems that in order to get one filled it won't be worth the risk/reward.

I'm doing as suggested in another thread, trading 1,2 or 3 lot spreads to help my learning curve, I've also watched every Dan Sheridan video on CBOE, and love his style. Will probably attend one of his seminars in Chicago this summer.

But, order execution seems to be the key to making these Condors work, and just wanted some advice to a new guy trying not to blow out my account.
More...

have been selling IC's for a long time and can't remember when i was really satisfied with the risk/reward of the spx.
if you just look at the spx vs rut for instance you will see that the r/r is almost always much better for rut. haveing listened to dan sheridan you know he refers to rut a lot as a IC play.
 
Quote from leonnis:

have been selling IC's for a long time and can't remember when i was really satisfied with the risk/reward of the spx.
if you just look at the spx vs rut for instance you will see that the r/r is almost always much better for rut. haveing listened to dan sheridan you know he refers to rut a lot as a IC play.
More...

I looked at RUT, but as you know, RUT made a huge move upwards in the last few weeks, which probably would have blown out the upside on a FEB IC.

He said in one of his videos that if an underlying was up more than 5% (can't remember the exact amount, it's in my notes laying on my desk at the house) in the past XX Days, to look elsewhere.

Last I looked at RUT, it was above that 5% threshhold. I'll take a look again.
 
Instead of SPX you could try the SPY iron condor with $2 (or more) wide verticals. This cuts commission in half, and helps even things out, especially given the (usually) better fills on the SPY. The liquidity can become an issue for distant strikes, though.
 
problem with SPY is that you can't get even remotely close to the OTM position as you should be able to on SPX and get the same % return.

The RUT looks tempting tho...it seems that the last monthor so has been really tough for index spread trading.
 
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