Iron Condors and Stupidity
- Thread starter jwcapital
- Start date
not if your trading with TOS...debit literally means buying a spread...and credit means collecting money for a spread(or single). In their program when you "sell" you get money (at least temporarily
) and when you "buy" they take money out of your account. In ALL their classes they teach you that debit spreads are buying and credit spreads are selling. I think "you" are using debit in the real world sense that when you spend your money (to buy the spread) you are debiting your checkbook?
edit..oops nevermind... I can't figure our why buying the IC is a "credit" spread to you?
You finally agreed that "this" market are much unlike most market ?
This market is really not a good playground for IC, but may be a good one for trend follower..
The weird thing is that even the market open low due to the job report, but it seem it still has a lot of momentum to move up and buyers still keep on coming into the market , will see today - If the market not tanked today for more than 150 points, then Monday the market will likely to move up like a sky rocket, just my guess..
Quote from SmithTheTrader:
You finally agreed that "this" market are much unlike most market ?
The weird thing is that even the market open low due to the job report, but it seem it still has a lot of momentum to move up and buyers still keep on coming into the market , will see today.
Do you really believe that this is a good market for trend following!?
The market has been wipsawing a lot so I really don't see how a trend following system could work, unless it's a short term trend. ICs have been working nicely if you know how to play them and can be patient.
Your logic and inability to understand English proves to me beyond doubt that you are RFT is a bad disguise.
I never said this was an ordinary market.
You used the superlative when you said this was <b>the MOST</b> weird market you had ever seen.
'The MOST weird' is not the same as 'this market is not like most markets.
So don't come along now and tell me that I agree with what you wrote. This market is different than most of the markets we see. But 'different than most' does not mean the "MOST" weird, or 'the most' anything else.
You simply have no respect for the words you use.
Mark
Quote from SmithTheTrader:
The weird thing is that even the market open low due to the job report, but it seem it still has a lot of momentum to move up and buyers still keep on coming into the market , will see today - If the market not tanked today for more than 150 points, then Monday the market will likely to move up like a sky rocket, just my guess..
Look like all the bad news in fundemental can't prevent the buyers to get into the market.
Market will ROCK and SHOOT UP like hell in the Monday ..This is only my $0.001.
Quote from RichardRimes:
not if your trading with TOS...debit literally means buying a spread...and credit means collecting money for a spread(or single). In their program when you "sell" you get money (at least temporarily
I think "you" are using debit in the real world sense that when you spend your money (to buy the spread) you are debiting your checkbook?
edit..oops nevermind... I can't figure our why buying the IC is a "credit" spread to you?
Seems there is a great deal of confusion regarding entering IC's. It is true that when you enter a credit IC, you are buying. Here is why: When I set up a credit IC, the bid/ask are negative numbers. The bid/for example may be -8.00 and the ask may
-7.00. Remember, -8.00 is SMALLER than -7.00. If you hit the ask, you are buying a credit IC. Why are the numbers negative? Accounting principals. A credit to you is negative, for you are taking away money from someone, whereas a debit is a positive number-you are giving money to someone. In any case, when I set up an iron condor with IB's TWS, the bid/ask are negative numbers. You will encounter this with all credit spreads. Conversely, all debit spreads will be positive numbers. This applies only to spreads. If I want to sell a put, for example, the naked put's bid/ask are positive.
Some comments: 1. the market is forward-looking (about 6-8 months). The news is baked in. People are looking at the positive effects from the numerous bailouts, Treasury programs, Fed Reserve programs, and an international effort. The psychological effect is now people are "chasing" this market. There has to be profit-taking in order to sustain a bull market. Instead, it appears, that people are using long puts to lock-in profits--that is why the VIX is rangebound. 2. Now, as far as IC's are concerned, trend doesn't matter. In a upward trend, I expect advances and profit-taking. The underlying just needs to stay within the body in order for me to maximize profit. Even if the underlying goes ITM, I can still make a small profit. Same is true of downward trends. 3. Another thing with IC's. We are comparing apples to oranges, for all of us have different body widths and wing spans. For some, the current market has put the short call ITM..for some of us the short call is still OTM. Also, we exit our IC's at different times and we use different calendar options..so lots of differences and applying the current market conditions without disclosing our trades makes for moot points. I am exiting my put spreads for about .30. 4. I read an article about Mean Reversion a few months ago (forget which publication). Someone went back 20 years and compared underlying movement against the highs and lows of the week of expiration and the first post-week. He found that the underlying tends to stay within the boundaries most of the time. He even suggested placing contrarian bets (either bull put spreads or bear call spreads when the underlying closes outside the range). So, this goes back to the first point. Markets supposedly move in step wise fashion. Currently, the market plunged in the beginning of March and skyrocketed the past few weeks. So, what is new about this market is the VIX. Seems, instead of just selling the underlying, people bought puts on the way down for protection, and now, they are buying the underlying and buying puts on the way up for profit protection. For disclosure purposes, I have a bear call spread where the short strike is 865..my put spreads are being exited for a profit (exiting around .30). so, all I have to worry about is the short call. I plan to exit all remaining legs the Monday of expiration. If I just hang in there, this will be a profitable trade--even if the underlying touches the strike..we will see. I may even exit 1/2..so who knows..depends on the underlying.
That is interesting because our trading platform is not like that. Not having used TWS I can't visualize what you are explaining.
I do disagree that a credit to me is negative because I'm taking money from someone. I consider it to be positive because "I" have the money in "MY" account! When money is gone from my account thats a BIG NEGATIVE!!!(at least to me...and I don't care what it has done for or to anyone else
Rather than beat a dead horse..perhaps the way to say it that we can all agree to is to be "short" or "long" an IC (or spread) When you are short you have sold...when you are long you have purchased??
edit...the entire thread of coach's "spx credit spread trading" was that credit spreads where spreads were "sold" and "credit" was received, not bought and paid for...