I sold a big call credit spread.

Quote from JJacksET4:

Don't mean to rub salt in the wounds if this position is still open, but here is a good example of some dangers of trying to take "easy" money with a directional credit spread bet.
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I am not trying to rub salt into the wound. Far from it, actually think that the original poster probably has many positions and hence this one going south is probably not going to matter to him.

What I am trying to disprove were those who thought I had no clue when I said I would have played the 16/17 spread.

Especially when it was said:

"Donna, that ratio sucks no matter who looks at it and no funds are sitting around selling call spreads and staying in business."
 
Quote from KINGOFSHORTS:

Yeah it went up faster than expected so I bought the underlying to cover delivery on assignment. at this point and sold to close out the 16 calls for 7 cents.

I bought quite a bit of GE at 14.78 today :) Basically I am holding a big ass covered call position.

Everyone is upgrading left and right the last few days.
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I was following this trade and here is question why buy the underlying and not close the position? It did not seem to me that you would have like this without plan b...

I looked at the numbers and there were some points when you could have closed at a profit?

BTW I kind of guessed that you would have done something pre-emptive...
 
Quote from KINGOFSHORTS:

Yeah it went up faster than expected so I bought the underlying to cover delivery on assignment. at this point and sold to close out the 16 calls for 7 cents.

I bought quite a bit of GE at 14.78 today :) Basically I am holding a big ass covered call position.

Everyone is upgrading left and right the last few days.
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Another quick question... I am guessing by this action this is what you usually do. Take a high return spread, but face the fact that more often than not you need to take alternative action?

I on the other hand don't buy the underlying, just stay out of the way of the market. Of course lower returns, but rarely need to take alternative action.

So the question becomes is it tough holding onto the GE position? With your original gain of 18 cents, plus 22 you did alright with this position, though what about the carrying costs? Did it hamper your overall portfolio?
 
Quote from christianhgross:

That is a dangerous move... The market is not going to be kind to you. In our hedge fund we focus on selling premium. That's all we do... And the main trader (I am junior trader-analyst) has a saying they don't give you that money for free. He would not touch a play like under any circumstance.

Personally I would have played the 16-17 spread, but hey that's me...
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Selling premium ? On what underlyings ?
 
Quote from christianhgross:

What I am trying to disprove were those who thought I had no clue when I said I would have played the 16/17 spread.


I was following this trade and here is question why buy the underlying and not close the position? It did not seem to me that you would have like this without plan b...

I looked at the numbers and there were some points when you could have closed at a profit?

BTW I kind of guessed that you would have done something pre-emptive...


I on the other hand don't buy the underlying, just stay out of the way of the market. Of course lower returns, but rarely need to take alternative action.
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Making a nickel credit on one trade is not very impressive. Indeed, you'd better be profitable nearly every time you try this.

Your spread may still be profitable. Even OP's initial spread has a chance, it's not over yet.

So, how would you have handled today? Would you have stayed out of the way of the market, closed it, or sit on your hands and hope.

KOS had money on the line and made some tough decisions. It's one thing to talk about this stuff, it's another to make the trade with OPM, and it's quite another experience when you trade your own money.
 
Shit!!!!!! I sold those 16 long calls too soon. I did not expect it to jump this fast over 16

Whoever bought those 7 cent 16 calls is fucking making a fortune today :)

Oh well.

If things stay as is I will make a bigger profit than expected when I end up delivering GE at the 15 strike.

But the clock keeps on ticking.

Anyhow I do not borrow to buy the equity, I used cash to buy the GE for delivery.

I am closing out a large bunch of SPY short put positions today.
 
It looks like that 16/17 bear call spread would not be doing so good now either.

Lets face it - if your on the wrong side of price movement, you can get whacked even if the stock will eventually go the other way.

JJacksET4
 
Quote from JJacksET4:

It looks like that 16/17 bear call spread would not be doing so good now either.

Lets face it - if your on the wrong side of price movement, you can get whacked even if the stock will eventually go the other way.

JJacksET4
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You are right... I roll, or I close. Actually I don't usually play stocks since they do event gap.

However, if I may talk about a play. I closed my SPY call positions yesterday and took my profits.

I was interested in seeing how people manage these things.
 
Quote from KINGOFSHORTS:

Shit!!!!!! I sold those 16 long calls too soon. I did not expect it to jump this fast over 16

Whoever bought those 7 cent 16 calls is fucking making a fortune today :)

Oh well.

If things stay as is I will make a bigger profit than expected when I end up delivering GE at the 15 strike.

But the clock keeps on ticking.

Anyhow I do not borrow to buy the equity, I used cash to buy the GE for delivery.

I am closing out a large bunch of SPY short put positions today.
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Interesting so you keep enough reserves. Smart... Yes those puts were pure cash. Had a bunch of 83 puts that I sold naked.

Typically I play naked calls or puts only.
 
Quote from donnap:

Making a nickel credit on one trade is not very impressive. Indeed, you'd better be profitable nearly every time you try this.

Your spread may still be profitable. Even OP's initial spread has a chance, it's not over yet.

So, how would you have handled today? Would you have stayed out of the way of the market, closed it, or sit on your hands and hope.

KOS had money on the line and made some tough decisions. It's one thing to talk about this stuff, it's another to make the trade with OPM, and it's quite another experience when you trade your own money.
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Closed it with profit. If a position is this far and theta is against me I just take my profits and run.

And you are right it is quite a thing to talk and another to do. Answer I do do. Though typically not on individual stocks. Too hard to model.
 
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