OEX weekly options

TJ here are the condor prices for Oct.
Sept 9
SOLD -20 VERTICAL NDX 100 OCT 10 2050/2075 CALL @1.10
Sept 13
SOLD -20 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.15

Sept 15 First rollout adjustment
BOT +20 VERTICAL NDX 100 OCT 10 2050/2075 CALL @2.35
Sept 16
SOLD -10 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.35
SOLD -10 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.35

Sept 17 more adjustments (screwed this up a bit)
BOT +40 VERTICAL NDX 100 OCT 10 2100/2125 CALL @.90
BOT +40 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.60
SOLD -80 VERTICAL NDX 100 OCT 10 2100/2125 CALL @.85

Added in the puts (should have done this a while ago)
SOLD -10 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.60
SOLD -30 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.80

Sept 24 added a weekly position to try
SOLD -10 VERTICAL NDX 100 (Weeklys) SEP5 10 2075/2100 CALL @1.70

Sept 24 added more to position
SOLD -20 VERTICAL NDX 100 OCT 10 2100/2125 CALL @3.20

So that leaves a net credit of $15,400
Using 175,000 of margin
and net positions of
40 Oct 1725/1700 puts
60 Oct 2100/2125 calls
10 weekly 2075/2100 calls

I think that is it (couldn't copy and paste the whole thing)

If this had been real money I would have adjusted again, but wnted to just leave it and see what would happen if the market kept going up (how much losses could have been)

Michael
 
Stanford

Interesting and you are learning by doing. Good way to learn. You absorb things in the subconcsious that way.

You are also on the right track, as you have to make mistakes to learn and refine the nuances of what you need and want, given different market conditions. Eventually, you will get a system of doing credit spreads down pat. Keep at it.
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I messed up my early in the day DEBIT SPREAD and restarted it yesterday.

Essentially I could not visualize in my mind, the parameters of a working functional debit spread, when I switched the distance apart of the strikes. I understood the dynamics of the one strike apart debit spread, but got lost when I started trying to figure out what prices I should be looking for in premiums and index movement, when I went to two and three strike apart spreads. Have it figured out now, I THINK? Will try it today and see if I have it right? This stuff has to become instinctive, without thinking about it and you only get this by practice.
Just like learning to play a piano keyboard.
-------------------------------------

Amusing to read some guy lamenting about the impossibility of earning $200,000 a year doing this. My goal originally is $120,000. I know I can do $48,000 to $60,000 with what I have now, gross returns, before paying income tax.
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falconview, how much money are you considering investing?

Is their tax in belize on money earned outside the country? Are you a resident there?

Michael
 
Stanford

This is an open forum. I'm not comfortable discussing those things here.

However I have local paperwork okay. You have to pay taxes in the USA with option trading. This country where it is applicable has a tax sharing agreement with the USA.

As for investment. I'm not sure what is available until I start. I will start with $5000 and add amounts in increments as I get comfortable and confident and proven as in the account balance. I'm in no hurry about anything. I'm doing this for various reasons. The main ones are the MENTAL CHALLENGE and the FUN of doing it. I'm not doing it out of need, or anything.

We just acquired another 3.3 acres on the beach on a barrier reef island and already have lots of property and other investments around the country. Life stays full and busy. My children are doing well and running most things these days. They are in their late 40's or early 50's and I think more these days on setting up TRUSTS and things for the grandchildren and great grandchildren to enable them to follow their own path. Until they are 30 none of them are going to listen to this old fart, as they mature and see the world.
 
Stanford

I'm watching my DEBIT spread this morning and analyzing the possibility of entering the credit spread ( overhead ).

I completed legging in the DEBIT SPREAD this morning. Got an entry level of $4.00 and will close it out at $5, if it ever gets there, for 3 contracts.

Keeping track on paper of the spread to ENTER and the SPREAD to Close it out. Getting a feel of the way the index moves and the spread changes as it does so.

I entered the spread yesterday on the buy side and completed it this morning on the sell side. ( scratch paper ) For a $4.00 cost.

What I'm recording is the Entry spread variation as the index moves and the Close spread as well.

I have 4.30 on the Enter, then $3.80 on the enter, $4.50 on the enter. So I know at least with a limit order in TOS eventually I could enter below $4 and get filled.

On the CLOSE spread, so far it is running $3.20, $3.30 and $3.40.

From this I'm surmising the index will have to move down over my bought side which is the 515/505 trade. I want the CLOSE side to go to $5 or better.

This practice is teaching me what to expect using a DEBIT SPREAD.
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On the credit spread. I'm sort of waiting. I was hoping for a jump UP a bit to get some premium on the 530 STRIKE, because there is nothing there right now. However will probably make a credit spread with the OEX 525 if the market drops below 515 later today. I'm probably going to miss some premium, as it was going for .30 cents earlier this morning ( the 525 STRIKE ) As the index is working it's way down, the available premium is dropping and now I was looking at .25 cents. I'll be lucky to get in for .15 cents I think.
You have to keep in mind the deviation you want.
 
falconview, interesting to see such a quick and extended rise in the NDX this last month. 14%, 6% in one week, which means we might have to rethink the 4% deviation on the weeklies to be safer, right?

What are you calculating for a monthly percentage that you feel is safe and sustainable?

Will have to come and visit Belize one day!


Michael
 
Stanford

You don't mind a dormitory, we have lots of bunk beds and two dormitories from when we operated a HOSTEL here. Closed it down. Got too old.

I'm surprised you noticed that 6% rise. I was looking at it the other day too. Actually it didn't bother me, as I was trading BULL PUT spreads under the rise. If you know the trend is going up, you switch gears.

I am not trading monthly credit spreads. I am starting to trade DEBIT SPREADS on monthlies, usually about 45 days out and short trades of 8 or 10 OEX points is expected. Haven't got there yet. None completed so far, just started working on it this week.

My preliminary calculations say that it takes $25,000 in MARGIN money, tied up as insurance against a short side hit, to earn + $400 with a credit spread. Whereas my estimate ( not confirmed yet ) is that I can make that same +$400 or + $300 with a negative outlay of $1200 in a Debit Spread.

Now you compare risking $1200 against $25,000 for the same return. I'll tell you more, if I succeed in doing it.
 
Quote from Stanford:

TJ here are the condor prices for Oct.
Sept 9
SOLD -20 VERTICAL NDX 100 OCT 10 2050/2075 CALL @1.10
Sept 13
SOLD -20 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.15

Sept 15 First rollout adjustment
BOT +20 VERTICAL NDX 100 OCT 10 2050/2075 CALL @2.35
Sept 16
SOLD -10 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.35
SOLD -10 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.35

Sept 17 more adjustments (screwed this up a bit)
BOT +40 VERTICAL NDX 100 OCT 10 2100/2125 CALL @.90
BOT +40 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.60
SOLD -80 VERTICAL NDX 100 OCT 10 2100/2125 CALL @.85

Added in the puts (should have done this a while ago)
SOLD -10 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.60
SOLD -30 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.80

Sept 24 added a weekly position to try
SOLD -10 VERTICAL NDX 100 (Weeklys) SEP5 10 2075/2100 CALL @1.70

Sept 24 added more to position
SOLD -20 VERTICAL NDX 100 OCT 10 2100/2125 CALL @3.20

So that leaves a net credit of $15,400
Using 175,000 of margin
and net positions of
40 Oct 1725/1700 puts
60 Oct 2100/2125 calls
10 weekly 2075/2100 calls

I think that is it (couldn't copy and paste the whole thing)

If this had been real money I would have adjusted again, but wnted to just leave it and see what would happen if the market kept going up (how much losses could have been)

Michael
More...

Stanford,

I could see that you did not get in a condor. So while the numbers are useful, I find it hard to draw conclusions on condors as related to you adjustment method.

At certain point I assume you will paper trade in the same manner as you intend to trade in real life. Testing all sort of things is however useful.
 
Quote from falconview:



. I know I can do $48,000 to $60,000 with what I have now, gross returns, before paying income tax.
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More...

Falconview: Good to read about your abilities. How much risk capital is assumed in your estimation and for how long are the figures? How certain are you to get those numbers? People might also ask you whether there are chance of loss and is yes how much.

I am impressed by your patience in the face of the market. Were you as patient in the past? If no how did you develop the patience part? I believe patience can be a friend to investors/traders.
 
TJ I was talking about credit spread adjustments (in this case put and calls). Can you tell me anything about the adjustments and my 150% strategy from these?

Thanks Michael
 
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