OEX weekly options

To Stanford

Things I have found most useful are sloping trend lines along the tops, and going upward, sloping trendlines along the bottoms. For Vertical credit spreads a dropping Bear market works good with both the sloping down trend line, usually 45 degrees and horizontal lines along every pull back upward as overhead resistance lines.
My favorite computer indicators are DMI, Momentum and either RSI, or Ultimate Oscillator. DMI takes some learning, but when you figure it out and can read it, very good. Lots of stuff on the internet teaching you.


I´m going to shift to buying option strategies for practice and study. You lucked out on that sudden move, I hope you don´t get over confident. EGO is your worst enemy in trading.
I´m still very unhappy about Vertical Credit Spreads. The risk/reward is just too lopsided. Though if you keep me informed about your adjustment work and learning process on the monthlies I may get convinced to switch some trading over that way. Want to know the losses involved with adjustments and time to recuperate the losses. Your running account balance there will tell the story.
 
Falconview, what about this questioin?
On the tos charts are all the studies you can add to the chart. I have been looking at MACD and the Williams %R, when you are talking about drawing trend lines, which of the studies do you like? Any other studies in general that you find to bee the most usefull?
Thanks Michael (after the market closes, and you have time)
 
Falconview, SORRY I see you already answered that, just saw it. after closing everything yesteday, I put on 30 contracts put spread NDX 1650/1625 (far OTM)
Was going to hold them until expiration, but sold this morning for $1100 profit. $9000 for the month so far.
I am not going to go live with real money until I experience a month where I have to make an adjustment to reduce my losses.
Michael
 
Stanford

For myself, I set the goal that when the account balance increased 50% I would go real money. Just an idea to ponder over.
 
to Stanford

The idea you are making money on using the credit spread as a directional play for premium appreciation never entered my head very much. Due to the weeklies being so heavily TIME DECAY orientated. Right now I´m waiting on this upward surge to settle down. I need another 1 1/2 hours to get the most of time decay for expiration week out of the premiums and then I can CLOSE THEM. Scared the living daylights out of me this morning as my three trades for this week are all OEX 500 and the market jumped almost to that on OPEN.

Break down if you can, how your premiums acted in the PUTS as the market rose.
I might consider that a play in the montlies myself in the future if I live out this day. I see it in the STRANGLE as the premiums jumped up to $18 and couldn´t afford to CLOSE it this morning because of that one side. Got to sit it out and watch.
 
never entered mine either, that was not the original plan. I will have to figure out how to track exactly how they behaved.
Hopefully someone else can enlighten us on some of the finer points. Where is TJ anyway? Thanks Michael
 
Well I got out of the STRANGLE and not going to trade such a margin expensive trade again. $9000 margin per contract versus the $500 for Vertical Credit Spreads. The Short Strangle and the Short Straddle only earned as a credit spread 1/2 of 1% on a trade. With margin so high, not even worthwhile no matter how well they work. Bad enough with Verticals at 3% return on margin.

At least I think I got out of it? I find it hard to figure out what that stuff on TOS is telling you, when it comes to money.

Still holding the 2 Vertical Credit Spreads and hoping to go to expiration but ready to close them if necessary. With the market only 3 OEX points below them it is hairy. Pretty much got all the TIME DECAY out of them, but still do not want to lose the $160 a spread for each of the two in commissions if I close them, or they expire. So holding until threatened.

What I want to know is do you make a profit on a favorable index move in the OEX for only 4 to 5 points? Will have to chart that I guess and allow for commissions both ways. The idea of closing early in your monthly is to re-cycle the money into another trade, if you can take a windfall profit. Get double the work out of it.
 
Stanford

How far apart are you putting your - Out the options- from the action when you put them on? In the NDX?

Next question, have you tried a ROLLOVER same month yet? If so, how much do you lose, if any, and where do you start, if you are going to keep a constant number of strikes away from the price action?

I see by my method I could have stayed in my WEEKLY this week and made about $1900 for the week, instead of chickening out and CLOSING with two hours to go. Instead I lost the week and probably $200 or $300 as well in commission costs. The expiration was one point below the SHORT end. Aaaah well! Just not my week.
 
Stanford

Been looking at the NDX

Interesting to note they have weeklies.

Was wondering how far out you could go and still get premium. Bit of learning to do switching the strikes in my mind.

I´m very interested in what a ROLLOVER would cost you done when the delta doubles in the NDX, but same month. Depending on that I have a new trading strategy in mind. Probably been done by others but they arn´t telling. Got to do it the hard way.

Assuming you put on a Vertical at delta 8 and when it doubled to delta 16 you ROLLED IT OVER? Same month. Wonder what the loss if any would be besides commissions.
 
Quote from falconview:

Stanford

How far apart are you putting your - Out the options- from the action when you put them on? In the NDX?

In the NDX, they go by 25 point spreads, so I have just been doing one spread, requires 25K margin per position.

Next question, have you tried a ROLLOVER same month yet? If so, how much do you lose, if any, and where do you start, if you are going to keep a constant number of strikes away from the price action?

I was just about to this week, when the market changed and I didn't have to. When I set up the trades to see what it would cost, it actually had a - number, so I assme actually a small credit. My goal is to roll out when it would cost 150% of the original premium I would have received. I read that in someones strategy and thought I would try it. Then just open another one spread down. Continue as needed. That is why I am hoping for a big swing against me, so I can do it in practice.

I see by my method I could have stayed in my WEEKLY this week and made about $1900 for the week, instead of chickening out and CLOSING with two hours to go. Instead I lost the week and probably $200 or $300 as well in commission costs. The expiration was one point below the SHORT end. Aaaah well! Just not my week.
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Didn't know to change the font for my answers to stand out, hope you can see them in there.

Dont know about the delta question, but will try and watch it. Why dont you look at trading monthlies, and then we can compare tactics?

Take care, Michael
 
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