HowardCohodas Index Options Credit Spread Trading Journal

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Quote from stevegee58:

Howard, what's your trigger for actually entering a trade?

I assume you're not just simply entering credit spreads every day that have a PoT of <20% and some minimum credit. Maybe you're using some TA on the underlying?
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The availability of funds released from quarantine from spreads recently expired. No TA on underlying. Just PoT and minimum credit.

When a spread reaches over 80% of its capped yield, I will try to close it and open a new spread with the same criteria I use for entering. I do not attempt the roll unless there is a spread I want available at the time. I do them sequentially so occasionally the one I was aiming to enter is no longer attractive when the old one was closed. No problem. Patience is rewarded.
 
Well my straight option buying paid off today. The $5000 trading account has risen from the 1st of December to today, to a nice 73% of account capital. Being up overall 73% is a nice feeling. Now if I can only keep it? ( grin! )
Got to open my cash account as fast as I can. Maybe tomorrow will start the process. From Central America it is a slow mail process anyway. At least it is warm! 88F Not like I see on TV up North with windrows of snow drifts and cars buried.
 
Quote from HowardCohodas:


My plan is to begin posting the elements of the decision tree this weekend. One of my readers in another forum did it in a flowchart. I'll try to locate it.
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Hey Howard, did you ever find that flowchart? I have some idea of how it would look but I'd like to see someone else's take on it too.
 
Quote from stevegee58:

Hey Howard, did you ever find that flowchart? I have some idea of how it would look but I'd like to see someone else's take on it too.
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Yes I did. On closer inspection, there were some flaws. I'm currently writing a "recipe" form of my methods which I think will be more informative. Reliable electricity among all the ice here would be helpful. :(
 
Howard

Getting thown out of this forum for some reason? Anyway I had an Iron Condor using Howards method and one side, the CALL side of 610/615 Calls is being threatened on the OEX almost. I looked the other day and it was at18% of loss of margin and remember I have to exit at 20% of loss of margin. But this morning even though it is more threatened, it only shows 15% of loss of margin. So what do I do? Close it or hold as I still have a bit of room to the upside.
 
Howard

I´m trying to get my pea brain around this concept. I´m looking at this Iron Condor. The CALLS are showing 15% of margin loss, the PUTS are into a profit of .05 cents. Since I got .60 cents for the PUT Spread side of the iron condor and I am thinking as this side would be FREE of MARGIN, basically I have cleared my .60 cents and close this PUT spread and let the CALL spread side stand on it´s own?
Then start to look at possible rollover into April for it? Does that sound like what you do?
 
Hey Howard, one of the rules I'm trying to tease out of your writings is when you put on the other credit spread that makes the iron condor.

It seems to me that if you can find a put credit spread that meets your entry criteria that there would usually be a corresponding call credit spread above the current price. Clearly you never put on an IC all at once, so when do you put on that matching credit spread?
 
Quote from stevegee58:

Hey Howard, one of the rules I'm trying to tease out of your writings is when you put on the other credit spread that makes the iron condor.

It seems to me that if you can find a put credit spread that meets your entry criteria that there would usually be a corresponding call credit spread above the current price. Clearly you never put on an IC all at once, so when do you put on that matching credit spread?
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I enter the companion spread as soon as one is available that meets my entry criteria. This is not always immediate because of a phenomenon known as skew. A given PoT level will not be equidistant from the underlying instrument price for the short PUT and the short CALL for the spreads. Furthermore, the credit to be received will be very different.

Because of skew, I may have to wait minutes, hours or even days before a companion meeting my requirements is available.
 
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