Believe it or not but the inverse (or worse) is also possible. Keep it balanced.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Oh wow, is this even normal?
- Thread starter darkshogun
- Start date
Believe it or not but the inverse (or worse) is also possible. Keep it balanced.
Believe it or not but the inverse (or worse) is also possible. Keep it balanced.
Of course. That's why I'm not trading real money at this time. I would probably stay away from the SPX altogether because of the wide spreads. I don't trust the P/L graphs on TOS but I did notice something alarming. The profit/loss line on one of the demo spreads I had bought had actually risen above the highest point of profit (expiration on this spread was a few weeks away, and this position gained more than it would have gained had it been kept till expiration in a matter of minutes, totally insane) at expiration. Troubling because obviously the inverse can happen too. Which makes me ask this question: how is margin calculated or affected by this extreme type of price behavior? If you sell a condor or a butterfly where the maximum loss at expiration is predefined, how will your account margin and profit/loss calculations on open positions be determined? For instance, say I sell a butterfly where the max loss is $2000 and the current p/L line is telling me the position is now $2500 in the hole. Not that I would actually do this, but pretend the entire account value is $2200. Would this trigger a margin call or would it not, since the max loss at expiration is $2000 and I have enough money to cover the max loss?
Also, does the price behavior of spreads on SPY behave as erratically as intraday SPX spread prices?
Of course. That's why I'm not trading real money at this time. I would probably stay away from the SPX altogether because of the wide spreads. I don't trust the P/L graphs on TOS but I did notice something alarming. The profit/loss line on one of the demo spreads I had bought had actually risen above the highest point of profit (expiration on this spread was a few weeks away, and this position gained more than it would have gained had it been kept till expiration in a matter of minutes, totally insane) at expiration. Troubling because obviously the inverse can happen too. Which makes me ask this question: how is margin calculated or affected by this extreme type of price behavior? If you sell a condor or a butterfly where the maximum loss at expiration is predefined, how will your account margin and profit/loss calculations on open positions be determined? For instance, say I sell a butterfly where the max loss is $2000 and the current p/L line is telling me the position is now $2500 in the hole. Not that I would actually do this, but pretend the entire account value is $2200. Would this trigger a margin call or would it not, since the max loss at expiration is $2000 and I have enough money to cover the max loss?
Also, does the price behavior of spreads on SPY behave as erratically as intraday SPX spread prices?
There is no variation margin on a fly. There is no margin at all, just the risk. If you're long the call fly at $220 then that is the req. Just bite the bullet and trade some one lot SPY in a production account. Nobody is going to wipe you ass indefinitely, well, unless you're my kids. They feel entitled. Do you?
There is no variation margin on a fly. There is no margin at all, just the risk. If you're long the call fly at $220 then that is the req. Just bite the bullet and trade some one lot SPY in a production account. Nobody is going to wipe you ass indefinitely, well, unless you're my kids. They feel entitled. Do you?
I thought this was a site to share ideas. If these posts annoy you then LEAVE! You were a beginner once too smart ass.
I thought this was a site to share ideas. If these posts annoy you then LEAVE! You were a beginner once too smart ass.
C'mon man, jokes aside, he just gave you 2 valuable pieces of advice: market outlook for directional trades , and to trade SPY one-lot strategies to get experience in the real trading world with the best liquidity and low failing price.
Drownpruf also answered his question.
What is it with newbies thinking the world owes them?
What is it with newbies thinking the world owes them?
This has been covered countless times, but as Drownpruf said, you want to learn to trade do it with real money. A demo is only good to learn the platform, it will teach you nothing about getting fills on a fly or closing a position in real life.
Besides SPY, there are lower priced ETFs and single names where you can put on a fly for a hundred bucks or less.
Besides SPY, there are lower priced ETFs and single names where you can put on a fly for a hundred bucks or less.
It's good advice, thanks. I don't think anyone owes me anything. If I want to day trade I have to wait till a spec house sells so I can plow in 25K (screw the gov. and its silly rules for us babies who can't take care of our own money). Until then I just have to demo or practice with longer term trades on a real account. Do you guys prefer to play it slow and safe or do you like to daytrade?
With option spreads the real money comes in holding until at least close to expiration, so that is what I do. Others close once they get a decent return per their criteria.
With vanilla options it's a straight directional trade and that is how I manage it.
Have a look at some of the options journals, good stuff from atticus.
With vanilla options it's a straight directional trade and that is how I manage it.
Have a look at some of the options journals, good stuff from atticus.
It's good advice, thanks. I don't think anyone owes me anything. If I want to day trade I have to wait till a spec house sells so I can plow in 25K (screw the gov. and its silly rules for us babies who can't take care of our own money). Until then I just have to demo or practice with longer term trades on a real account. Do you guys prefer to play it slow and safe or do you like to daytrade?
PDT rules? Trade narrow strikes and hold at least one day. That TOS sim is a joke.