OEX weekly options

Elite think

Butterfly test

When you have the time and inclination. I think I had the wrong impression in my mind of what the Butterfly was. Been doing a bit of reading on it.

I put a butterfly on, just to see how it looked, on scratch paper using CALLS.

The index was at 530 in the OEX

So one credit spread and one debit spread on top of each other. Both are in CALLS, a directional trade. That seems to be what has confused the picture I had in my mind.
If this is right then I might try it on Monday on the weeklies.

At any rate I ended up sell 530 Calls for 11.50
Credit Spread buy 545 Calls at $5.60 for a credit of + $5.90

Then I put the debit spread in calls and it went like this:

buy 530 @ $11.40
sell 545 @ $ 4.30 for a debit of - $1.20

Somehow I had thought I would be above and below by 3 strikes, or 15 points. But what I have is the completed butterfly which looks like a BET ON DIRECTION basically. Being ATM for the sold sides and below at 545 Calls on the buying sides.

NOW MY QUESTION IS: DID I GET THIS SETUP RIGHT SO FAR?
_______________________

Stanford

Thanks for the come back on your monthly with adjustments. I'm very curious at the end of the day, if you came out okay on this? Save me at least one month of experimentation and I can decide to go from there or not.

I'm currently doing scratch paper long options, using the system of an insurance debit spread. So far it has lost -$6800 in the gyrations. ( reverses ) But I THEEEENK that some fine tuning is occurring as to the decision making tree in my mind. If this was real money, I would have to change my pants.
 
There has been an ad on BIG CHARTS for a couple of weeks that the market technically will drop by Oct 31st. I didn't give it much attention.

However the ATR's are changing and pull backs are getting a lower top. So my guess the market top has just been reached and the trend reversal is taking place right now. Meaning I will concentrate of PUT trades next week. And a BEAR CALL CREDIT SPREAD for next week.

This may be wrong, nor is there any confirmation yet by other indicators. Just a feeling I have though. Sort of like smelling rain, before it rains. Most indicators are still in BULL mode.
 
When do the accounts settle today?

Wow, really have to be careful about that 30 point jump at the opening today. Dont the settlement prices depend partly on the opening price today? Good think I bought back the NDX 2075/2100 yesterday, or those would hae cost money, right.

Where do you go to find a list of the actual settlement prices?

Thanks Michael
 
Michael

I don't know. I think for the OEX it is tomorrow morning Saturday they bring it up to date. The actual trading at expiration seems to end around 2 p.m. as the premiums shrink to zero and .5 cents for out-the-money in the OEX.

So long as your are in your channel without touching the out-the-money options your credit spreads will be okay. If you are in TOS with the trading, they will have your account balance already calculated and entered by around 3 p.m. before the market closes, due to the fact that everything has pretty much expired by then. I'm good for this week.
 
Stanford

Well my take for this week was a total of + $958

$618 on the Monday Tuesday trade and + $340 on the credit spread last half of the week. These were regular trades I am confident I have it figured out, more or less.

I did some experimenting with a trading system and lost - $6800 on that in three different trades using scrap paper. Learn't a few things from the experiment. Question is: will I be able to put the lessons learned to practical money making use?
Don't think the market will drop and hit my spread, so for this week, and today, it is more or less all over trading for me.

If I have the Butterfly correct, want to try it next week. As it is a TIME DECAY primarily type of trade, anxious for Elite think to chime in and tell me if I have it right as to the setup.

I was reading about the possibility of making up to 50% on margin with the butterfly. Not sure I get the mechanics of that at all, yet? Still puzzling about the setup part of it first. Be a few weeks before any kind of nuances start to come into my learning.
 
Stanford

Thinking about setting up an Iron Condor early today.

Was wondering about that 150% of premium you use for adjustment. What do you mean about premium? Are you talking the value of the spread itself, or the sold side, or bought side? If you say 150% I take it, if you were $3, you would be adjusting if it reached $7.50 or something like that in a rollover.

Can you clarify please?
 
Stanford

Well in lieu of the adjustment premium thingy of yours. I decided to start by putting on an Iron Condor, 3% deviation out. I could only get the PUTS and not the CALLS as they don't have any premium. Have to wait for market action to do that. My idea is that if I get a one strike move, I would rollover to a 4% adjustment, and repeat to a 5% adjustment and see how it works out for money.

We shall see how it works out for the weekly. This is a scrap paper trade experiment.
 
falconview, I am saying that if you take in a $1 in credit, thenyou would roll or close when it would cost you $1.50 on the debit side.

I put on a test trade that I hoped would go ITM yesterday to see what happens, and it did. Hasn't settled yet, so interested to see how that works. It was an NDX 2175/2100 and at the open today it was over 2175. So now in my positions there is a little ITM logo.

I thought the NDX option ceased trading on Thursday and the price was determined by the open Friday AM.

Michael
 
Quote from falconview:

Elite think

Butterfly test

When you have the time and inclination. I think I had the wrong impression in my mind of what the Butterfly was. Been doing a bit of reading on it.

I put a butterfly on, just to see how it looked, on scratch paper using CALLS.

The index was at 530 in the OEX

So one credit spread and one debit spread on top of each other. Both are in CALLS, a directional trade. That seems to be what has confused the picture I had in my mind.
If this is right then I might try it on Monday on the weeklies.

At any rate I ended up sell 530 Calls for 11.50
Credit Spread buy 545 Calls at $5.60 for a credit of + $5.90

Then I put the debit spread in calls and it went like this:

buy 530 @ $11.40
sell 545 @ $ 4.30 for a debit of - $1.20

Somehow I had thought I would be above and below by 3 strikes, or 15 points. But what I have is the completed butterfly which looks like a BET ON DIRECTION basically. Being ATM for the sold sides and below at 545 Calls on the buying sides.

NOW MY QUESTION IS: DID I GET THIS SETUP RIGHT SO FAR?
_______________________

Stanford

Thanks for the come back on your monthly with adjustments. I'm very curious at the end of the day, if you came out okay on this? Save me at least one month of experimentation and I can decide to go from there or not.

I'm currently doing scratch paper long options, using the system of an insurance debit spread. So far it has lost -$6800 in the gyrations. ( reverses ) But I THEEEENK that some fine tuning is occurring as to the decision making tree in my mind. If this was real money, I would have to change my pants.
More...

there are different ways to set this up, but, here is the basic jist. You got the call side, but the put side is a credit spread as well. To complete fly you would sell the 530x515 put spread for week 4. What do you end up with as a credit?

The other perspective is a short 530 straddle, long 515x545 strangle.
 
Falconview, here is the monthly statement, I stopped it here because I didn't want to confuse it with the Novembers I placed.

Hope you can figure it out. Once I look now this month would be 4% You will see I added 100,00 Oct 1


Cash Balance DATE TIME TYPE REF # DESCRIPTION FEES COMMISSIONS AMOUNT BALANCE
9/8/10 22:00:00 BAL Cash balance at the start of 09.09 208,790.75
9/9/10 10:22:03 TRD 114831575 SOLD -20 VERTICAL NDX 100 OCT 10 2050/2075 CALL @1.10 -69.95 2,200.00 210,920.80
9/9/10 22:00:00 BAL Cash balance at the start of 10.09 210,920.80
9/10/10 22:00:00 BAL Cash balance at the start of 11.09 210,920.80
9/11/10 22:00:00 BAL Cash balance at the start of 12.09 210,920.80
9/12/10 22:00:00 BAL Cash balance at the start of 13.09 210,920.80
9/13/10 09:10:24 TRD 115312021 BOT +20 VERTICAL NDX 100 SEP 10 1725/1700 PUT @.10 -69.95 -200.00 210,650.85
9/13/10 22:00:00 BAL Cash balance at the start of 14.09 210,650.85
9/14/10 09:18:04 TRD 115549364 SOLD -20 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.15 -69.95 2,300.00 212,880.90
9/14/10 09:20:09 TRD 115549951 BOT +20 VERTICAL NDX 100 OCT 10 2050/2075 CALL @2.35 -69.95 -4,700.00 208,110.95
9/14/10 22:00:00 BAL Cash balance at the start of 15.09 208,110.95
9/15/10 22:00:00 BAL Cash balance at the start of 16.09 208,110.95
9/16/10 08:54:33 TRD 116007373 SOLD -10 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.35 -39.95 1,350.00 209,421.00
9/16/10 08:58:47 TRD 116008217 SOLD -10 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.35 -39.95 1,350.00 210,731.05
9/16/10 22:00:00 BAL Cash balance at the start of 17.09 210,731.05
9/17/10 07:01:17 TRD 116180825 BOT +40 VERTICAL NDX 100 OCT 10 2100/2125 CALL @.90 -129.95 -3,600.00 207,001.10
9/17/10 07:09:02 TRD 116184959 BOT +40 VERTICAL NDX 100 OCT 10 2075/2100 CALL @1.60 -129.95 -6,400.00 200,471.15
9/17/10 07:16:27 TRD 116188715 SOLD -80 VERTICAL NDX 100 OCT 10 2100/2125 CALL @.85 -249.95 6,800.00 207,021.20
9/17/10 08:08:04 TRD 116210562 SOLD -10 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.60 -39.95 600.00 207,581.25
9/17/10 10:23:17 TRD 116250263 SOLD -30 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.80 -99.95 2,400.00 209,881.30
9/17/10 22:00:00 BAL Cash balance at the start of 18.09 209,881.30
9/18/10 22:00:00 BAL Cash balance at the start of 19.09 209,881.30
9/19/10 22:00:00 BAL Cash balance at the start of 20.09 209,881.30
9/20/10 22:00:00 BAL Cash balance at the start of 21.09 209,881.30
9/21/10 22:00:00 BAL Cash balance at the start of 22.09 209,881.30
9/22/10 22:00:00 BAL Cash balance at the start of 23.09 209,881.30
9/23/10 22:00:00 BAL Cash balance at the start of 24.09 209,881.30
9/24/10 06:31:01 TRD 117266053 SOLD -10 VERTICAL RUT 100 OCT 10 710/730 CALL @.80 -39.95 800.00 210,641.35
9/24/10 09:45:57 TRD 117431947 SOLD -10 VERTICAL NDX 100 (Weeklys) SEP5 10 2075/2100 CALL @1.70 -39.95 1,700.00 212,301.40
9/24/10 12:25:53 TRD 117466057 SOLD -20 VERTICAL NDX 100 OCT 10 2100/2125 CALL @3.20 -69.95 6,400.00 218,631.45
9/24/10 22:00:00 BAL Cash balance at the start of 25.09 218,631.45
9/25/10 22:00:00 BAL Cash balance at the start of 26.09 218,631.45
9/26/10 22:00:00 BAL Cash balance at the start of 27.09 218,631.45
9/27/10 22:00:00 BAL Cash balance at the start of 28.09 218,631.45
9/28/10 09:09:25 TRD 117890813 BOT +10 CONDOR RUT 100 OCT 10 710/720/730/740 CALL @.60 -69.95 -600.00 217,961.50
9/28/10 22:00:00 BAL Cash balance at the start of 29.09 217,961.50
9/29/10 22:00:00 BAL Cash balance at the start of 30.09 217,961.50
9/30/10 22:00:00 BAL Cash balance at the start of 01.10 217,961.50
10/1/10 09:32:10 TRD 118628248 BOT +10 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.20 -39.95 -200.00 217,721.55
10/1/10 09:33:50 TRD 118628296 BOT +30 VERTICAL NDX 100 OCT 10 1725/1700 PUT @.20 -99.95 -600.00 217,021.60
10/1/10 09:48:30 FND 118631656 Cash adjustment 5.00 217,026.60
10/1/10 09:49:41 FND 118631914 Cash adjustment 1.00 217,027.60
10/1/10 10:28:31 FND 118642970 Cash adjustment 23.00 217,050.60
10/1/10 10:30:48 FND 118643500 Cash adjustment 1,000,001.00 1,217,051.60
10/1/10 10:32:14 FND 118644306 Cash adjustment -900,000.00 317,051.60
10/1/10 10:34:16 TRD 118644774 SOLD -30 VERTICAL NDX 100 OCT 10 1800/1750 PUT @.80 -99.95 2,400.00 319,351.65
10/1/10 12:07:25 TRD 118667391 SOLD -20 VERTICAL NDX 100 OCT 10 2125/2150 CALL @.40 -69.95 800.00 320,081.70
10/1/10 22:00:00 BAL Cash balance at the start of 02.10 320,081.70
10/2/10 22:00:00 BAL Cash balance at the start of 03.10 320,081.70
10/3/10 22:00:00 BAL Cash balance at the start of 04.10 320,081.70
10/4/10 08:20:44 TRD 118660717 BOT +60 VERTICAL NDX 100 OCT 10 2100/2125 CALL @.30 -189.95 -1,800.00 318,091.75
10/4/10 22:00:00 BAL Cash balance at the start of 05.10 318,091.75
10/5/10 22:00:00 BAL Cash balance at the start of 06.10 318,091.75
10/6/10 10:40:34 TRD 119384157 SOLD -10 VERTICAL NDX 100 OCT 10 2050/2075 CALL @3.20 -39.95 3,200.00 321,251.80
10/6/10 11:27:22 TRD 119397908 SOLD -10 VERTICAL NDX 100 OCT 10 1875/1850 PUT @.65 -39.95 650.00 321,861.85
10/6/10 22:00:00 BAL Cash balance at the start of 07.10 321,861.85
10/7/10 06:40:00 TRD 119430235 SOLD -10 VERTICAL NDX 100 (Weeklys) OCT2 10 2050/2075 CALL @.75 -39.95 750.00 322,571.90
10/7/10 06:58:24 TRD 119563645 BOT +10 VERTICAL NDX 100 (Weeklys) OCT2 10 2050/2075 CALL @.50 -39.95 -500.00 322,031.95
10/7/10 07:01:58 TRD 119565468 BOT +10 VERTICAL NDX 100 OCT 10 2125/2150 CALL @.10 -39.95 -100.00 321,892.00
10/7/10 07:03:53 TRD 119566260 BOT +10 VERTICAL NDX 100 OCT 10 2125/2150 CALL @.10 -39.95 -100.00 321,752.05
10/7/10 07:06:03 TRD 119567333 SOLD -10 VERTICAL NDX 100 OCT 10 2050/2075 CALL @3.55 -39.95 3,550.00 325,262.10
10/7/10 07:06:37 TRD 119567714 BOT +20 VERTICAL NDX 100 OCT 10 2050/2075 CALL @3.65 -69.95 -7,300.00 317,892.15
10/7/10 09:14:00 TRD 119612082 SOLD -20 VERTICAL RUT 100 OCT 10 630/625 PUT @.10 -69.95 200.00 318,022.20
10/7/10 09:15:23 TRD 119612168 SOLD -10 VERTICAL RUT 100 OCT 10 630/625 PUT @.10 -39.95 100.00 318,082.25
10/7/10 10:13:42 TRD 119627377 SOLD -20 VERTICAL NDX 100 OCT 10 1875/1850 PUT @.50 -69.95 1,000.00 319,012.30
10/7/10 11:10:36 TRD 119641595 SOLD -20 VERTICAL RUT 100 OCT 10 720/740 CALL @.60 -69.95 1,200.00 320,142.35
10/7/10 11:58:17 TRD 119654138 SOLD -20 VERTICAL RUT 100 OCT 10 620/590 PUT @.20 -69.95 400.00 320,472.40
10/7/10 12:22:43 TRD 119659697 SOLD -10 VERTICAL RUT 100 OCT 10 720/730 CALL @.50 -39.95 500.00 320,932.45
10/7/10 22:00:00 BAL Cash balance at the start of 08.10 320,932.45
10/8/10 06:53:01 TRD 119807398 BOT +10 VERTICAL RUT 100 OCT 10 720/730 CALL @.35 -39.95 -350.00 320,542.50
10/8/10 06:54:07 TRD 119808436 BOT +30 VERTICAL RUT 100 OCT 10 720/740 CALL @.45 -99.95 -1,350.00 319,092.55
10/8/10 12:28:09 TRD 119916497 BOT +30 VERTICAL RUT 100 OCT 10 630/625 PUT @.10 -99.95 -300.00 318,692.60
TOTAL ($2,678.15) $112,580.00 $318,692.60
 
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