OEX weekly options

Stanford

HolyCriminy!

Wow! You have been a busy little boy! I couldn´t make any sense out of that. Did you make any money? You seem to think you made 4% Thats good enough for me to try. I´ll take your word for it. I take it multiple trades. Dropped my keyboard and think I´ve ruined my space bar. Darned thing.
 
ELITE THINK

Thanks for the comeback. BUTTERFLY

Oh boy! I´ve run through this thing about six times. The numbers are driving me crazy.

You mention a credit,but I keep ending up with a debit.

BUTTERFLY

CALLS
credit spread CALLS
sell 530 @ +4.80
buy 545 @ -.40 + $4.40

debit spread CALLS
sell 530 @+ 4.80
buy 515 @ -19.60 ( -14.80)

PUTS


credit spread PUTS
sell 530 @ +3.30
buy 515 @ -1.00 +$2.30

debit spread PUTS
sell 530 @ + 3.30
buy 545 @ - 16.90 ( -13.60)

THAT GIVES ME A NET DEBIT?

Am I anywhere to being CLOSE on the right track?
-------------------------------

I´m looking at this and maybe I only need one sell in the middle?
 
Quote from falconview:

Stanford

HolyCriminy!

Wow! You have been a busy little boy! I couldn´t make any sense out of that. Did you make any money? You seem to think you made 4% Thats good enough for me to try. I´ll take your word for it. I take it multiple trades. Dropped my keyboard and think I´ve ruined my space bar. Darned thing.
More...

Falconview, if you want to use 100,000 of real cash, it is a good idea to figure out what was done and what the profit is. It does take some time, but if you take each trade, figure out the credit to enter, and then follow to see if they were bought back or expired. If you do that you will see that initial bank balance 208,000 and final balance was over 218,000. So even with the adjustments, made that 4% ($10,000 profit using $250,000) The full 250,00 was not used the whole month, but you need to factor it in for the percentage.

The adjustments were the two roll outs in the NDX calls, from 2050/75 to 2075/2100 and eventually 2100/2125. Even at that I closed out the 2100/2125 early when there was a drop and I could buy them back for still a good profit.

I am going to add that into my strategy, if I have 80% of maximum credit already, I will close out and not risk any more.

Michael
 
Stanford

Starting to sound, like you have a workable money printing machine there? I´m delighted for you, as there are no losses at all. When you can design that system, you are in business.
Keep me up to date please? I´m still curious, but still messing with weekly for credit spread and monthly for straight option buys. Trying to identify and get my straight option plays more accurate with a game plan. The money is in the straight buying. If you can work it out on a risk and reward basis.
I wait now for ELITE THINK to come back to his computer. I don´t know if I have the BUTTERFLY right or not. Thinking about it at the beginning stages here twists my brains, the few I have left.
 
falconview, very early days cant say that yet, as there will have to be losses at one time, just trying to learn to limit them.

I have two accounts going, the first one I showed were my trades, and this one is from the resommendations from the MCTO newsletter. This was the first month and the profit was 4.7%. They were getting very close to making an adjustment on the last day and had given recommendations on what to do in case the index reached certain targets. So far I like what they do.
Note I added in 100,000 part way through the month.

Would have done better (as would their autotraded account, as I was not comfortable on the last day and closed out some positions that they would not have.

Michael


Cash Balance
DATE TIME TYPE REF # DESCRIPTION FEES COMMISSIONS AMOUNT BALANCE
10/3/10 22:00:00 BAL Cash balance at the start of 04.10 100,000.00
10/4/10 08:58:59 TRD 118869218 tIP SOLD -25 VERTICAL RUT 100 OCT 10 620/610 PUT @.70 -84.95 1,750.00 101,665.05
10/4/10 09:01:31 TRD 118870577 tIP SOLD -80 VERTICAL SPY 100 OCT 10 107/105 PUT @.11 -0.03 -249.95 880.00 102,295.07
10/4/10 22:00:00 BAL Cash balance at the start of 05.10 102,295.07
10/5/10 07:46:12 TRD 118868127 tIP SOLD -30 VERTICAL RUT 100 OCT 10 720/730 CALL @.45 -99.95 1,350.00 103,545.12
10/5/10 22:00:00 BAL Cash balance at the start of 06.10 103,545.12
10/6/10 06:31:00 TRD 119265918 SOLD -30 VERTICAL MID 100 OCT 10 850/860 CALL @.30 -99.95 900.00 104,345.17
10/6/10 07:29:53 TRD 119319037 tIP BOT +80 VERTICAL SPY 100 OCT 10 107/105 PUT @.02 -0.01 -249.95 -160.00 103,935.21
10/6/10 10:28:09 TRD 119380350 BOT +20 VERTICAL RUT 100 OCT 10 720/730 CALL @.45 -69.95 -900.00 102,965.26
10/6/10 10:29:45 TRD 119380773 SOLD -40 VERTICAL RUT 100 OCT 10 720/730 CALL @.45 -129.95 1,800.00 104,635.31
10/6/10 22:00:00 BAL Cash balance at the start of 07.10 104,635.31
10/7/10 12:27:50 TRD 119661231 SOLD -20 VERTICAL RUT 100 OCT 10 720/730 CALL @.50 -69.95 1,000.00 105,565.36
10/7/10 22:00:00 BAL Cash balance at the start of 08.10 105,565.36
10/8/10 07:28:16 TRD 119825849 SOLD -40 VERTICAL RUT 100 OCT 10 640/630 PUT @.35 -129.95 1,400.00 106,835.41
10/8/10 10:21:14 TRD 119882147 SOLD -20 VERTICAL SPY 100 OCT 10 120/122 CALL @.07 -0.01 -69.95 140.00 106,905.45
10/8/10 22:00:00 BAL Cash balance at the start of 09.10 106,905.45
10/9/10 22:00:00 BAL Cash balance at the start of 10.10 106,905.45
10/10/10 22:00:00 BAL Cash balance at the start of 11.10 106,905.45
10/11/10 22:00:00 BAL Cash balance at the start of 12.10 106,905.45
10/12/10 03:59:18 FND 120274409 Cash adjustment 100,000.00 206,905.45
10/12/10 22:00:00 BAL Cash balance at the start of 13.10 206,905.45
10/13/10 11:25:39 TRD 120647127 BOT +20 VERTICAL SPY 100 OCT 10 120/122 CALL @.11 -0.01 -69.95 -220.00 206,615.49
10/13/10 22:00:00 BAL Cash balance at the start of 14.10 206,615.49
10/14/10 07:14:55 TRD 120825538 BOT +70 VERTICAL RUT 100 OCT 10 720/730 CALL @.25 -219.95 -1,750.00 204,645.54
10/14/10 08:23:41 TRD 120853810 SOLD -50 VERTICAL RUT 100 OCT 10 720/730 CALL @.15 -159.95 750.00 205,235.59
10/14/10 12:24:00 TRD 120919918 BOT +40 VERTICAL RUT 100 OCT 10 720/730 CALL @.10 -129.95 -400.00 204,705.64
10/14/10 22:00:00 BAL Cash balance at the start of yesterday 204,705.64
10/15/10 22:00:00 BAL Cash balance at the start of today 204,705.64
TOTAL ($0.06) ($1,834.30) $106,540.00 $204,705.64
 
Quote from falconview:

ELITE THINK

Thanks for the comeback. BUTTERFLY

Oh boy! I´ve run through this thing about six times. The numbers are driving me crazy.

You mention a credit,but I keep ending up with a debit.

BUTTERFLY

CALLS
credit spread CALLS
sell 530 @ +4.80
buy 545 @ -.40 + $4.40

debit spread CALLS
sell 530 @+ 4.80
buy 515 @ -19.60 ( -14.80)

PUTS


credit spread PUTS
sell 530 @ +3.30
buy 515 @ -1.00 +$2.30

debit spread PUTS
sell 530 @ + 3.30
buy 545 @ - 16.90 ( -13.60)

THAT GIVES ME A NET DEBIT?

Am I anywhere to being CLOSE on the right track?
-------------------------------

I´m looking at this and maybe I only need one sell in the middle?
More...

LOL.

short 530x545 call spread.
short 530x515 put spread.

Net credit.
 
Elite Trader

Okaaaaay! So the two credit spreads give me a total credit.

The problem as I can see it, is the 530 is where the index is. Therefore if I did this in the OEX, would I not be exposed to ASSIGNMENT as the market moved? Should I not stick to European style index options to do a butterfly?

I've never got a DEBIT SPREAD to work before. They were too slow. So what happens to the DEBIT in these spreads of the butterfly?

Lets say you hold them for a week, or 5 days to weekly expiration. What do they do? You hold them to expiration, or you close them if they can be bought back? How does that happen, or work?

I'll do one similar this week on scratch paper to see what happens to them both. What is SUPPOSED TO HAPPEN?

Thanks for the comeback.
 
Elite Trader

Well got on what I THEEENK is a butterfly in the weekly OEX?
For learning purposes that is probably okay.

Credit Spreads
530/515 +$3.30 - 1.00 = +$2.30
530/545 +3.30 -.50 = + @2.90

If the index expires at 530 will make +5.20

a) Suppose the index does not expire at 530? What then? Guess I'll see if I wait a week.

Debit Spreads
530/545 -5.80 + .15 for net debit of -5.65
530/515 -3.30 + .50 for net debit of -2.80

If the index expires at 530 will gain $16.90

b) If the index does not expire at 530 what then? A week will tell.
____________________________

I recollect when doing SHORT STRADDLES that if the index bounced up and down, every time it would pass 530, you had the opportunity to exit with maximum gain, Collecting TIME DECAY I suppose?
 
Michael

Taking a look at your list of spreads, on the RUT

I can't see how you would make any money on the adjustment, so I was wondering how you could make a good profit on them otherwise. I see you were roughly following the index up and down. In other words, if I get this right, you diversified your credit spreads and made numerous trades. You lost on two, but made overall because of the many, in diversification.
That is a strategy of itself looks like. Never actually thought of it that way before.
In this bull trend, a monthly bar swing is about 40 points in the OEX or whatever equivalent in the RUT. Roughly an 8% deviation up and down for the price action.
--------------------------------------------

I'm hoping TJ or Elite Trader on here can answer me about butterfly spreads and assignment. Since they are done ATM.
______________________________

Michael, I would hazard a guess, but will know better this week, that a butterfly would double your returns, if done overlapping? In other words every time you put on a credit spread, you overlap with a debit spread. Which is called a butterfly.
 
falconview, I really have no idea what a butterfly is, just barely learning what a credit spread is! Once you get it figured out, would love to know, thanks

Michael
 
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