SPX Credit Spread Trader

Trader:

I want to make sure I'm clear on this. Trading the futures market gives you access to the S&P futures outside normal Wall Street trading hours, so you could trade the London bombing in the example you mentioned.

Is this the only advantage of trading the futures over the SPX?

Thanks.

Quote from traderanonymous:

rdemyan,

I trade the futures mkt as well as capture premium from my iron condors regularly. So if something unexpected happens I'm able to jump in the futures mkt & trade it accordingly. So far, a majority of my success has been from my month to month premiums (iron condors) however, having the ability to trade the futures mkt is a big advantage if needed.

For instance the London bombings day was a ton of opportunity. Mkt opened up way down of which I sold puts way out of money & once mkt began to put in a bottom I went long the underlying. Also, maybe only considering using 30 - 50% max of your available margin. Also, being long puts as was previously discussed is something to seriously consider. Further, I try to always be prepared to roll, cover or make any other necessary adjustments to my positions as I see fit.

The bottom line, I try to do my best to adapt to various mkt conditions. I'm not always correct but at least being prepared ahead of time & having a gameplan gives one a huge advantage. I wish I had Coach's advice when I first started, would have helped me to reduce my learning curve dramatically & keep more of my hard earned dollars.

I watch the mkt regularly. As far as stepping away from the mkt, I definitely won't do if mkt activity increases (mkt breaks out of trading range & volatility increases). Thankfully, I'm in a position to monitor mkt activity almost anytime. If I wasn't in this position I would definitly be much more conservative in my approach to capturing month to month premiums.

Thanks again Coach for all of your help.

Take care,

traderanonymous
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rdemyan,

Yes, you may trade during the globex session which is electronic (after hours). I typically don't do this due to liquidity issues & wait for the normal session to open up.

During the London bombings you could've traded the emini's on globex however, I waited for the mkt to open up & begin to base a bit prior to my going long the underlying. It's typical during times like that for there to be an initial flush & then a basing takes place before the players (institutions step in). This is not guaranteed of course but more times than not this is what happens. I try to always be aware of important mkt levels & monitor how the mkt behaves around them. Sometimes I'll give the mkt a little breathing room around these areas like the 1180 area b/c the mkt makers love to flush out all the stops from the retailers prior to making their reversals.

Having the ability to trade futures just adds another weapon to your trading arsenal & makes you that more versatile.

Take care,
traderanonymous
 
This morning was a great example. I traded the e-mini in the pre-market hours because the build-up after the jobs report and got in and out before 9:00 AM.

But you cannot compare the SPX and the E-mini. On the SPX you can apply different option strategies such as the Iron Condors and such. Futures you can only go long or short. With options on futures you can do the same things as on the SPX. But I use E-minis and SPX options for two different things. I trade the SPX options month to month and I use the E-mini S&Ps for intraday day trading.

Phil


Quote from rdemyan:

Trader:

I want to make sure I'm clear on this. Trading the futures market gives you access to the S&P futures outside normal Wall Street trading hours, so you could trade the London bombing in the example you mentioned.

Is this the only advantage of trading the futures over the SPX?

Thanks.
More...
 
Quote from optioncoach:

This morning was a great example. I traded the e-mini in the pre-market hours because the build-up after the jobs report and got in and out before 9:00 AM.

But you cannot compare the SPX and the E-mini. On the SPX you can apply different option strategies such as the Iron Condors and such. Futures you can only go long or short. With options on futures you can do the same things as on the SPX. But I use E-minis and SPX options for two different things. I trade the SPX options month to month and I use the E-mini S&Ps for intraday day trading.

Phil
More...

Is there any way you could share on how you trade or what you use to trade ES?

Thanks.

Daytrader85
 
Does anyone use the Redoption Strategies? If so, what has your experience been. I have been watching the Calendar Spreads and Double Diagonals for the last 2 months. They look interesting and I understand the stragies (always a bonus :) ). I would like to know others past experience. :confused:
 
Phil,

This has been an awesome learning thread on SPX credit spreads.

Would you consider starting a Ratio Backspread thread?

Thanks :)

Murray
 
Problem with using cal as hedges is that u have to protect both sides of your sold verticals which means u have to load up on a LOT of vega. The expected return might be better on paper BUT by the time u factor in the legs, commission,vig you are probably better off defending your core pos. not to mention if under has a big move blowing thru your cal AND your condor you are fu#$ed!
 
Hmmm... give away my ES day trading secrets? Well I will think about it because the nature of the trading means I cannot do any real-time coverage since the trades move fast and last a short period of time. Perhaps I can discuss them in general but trading futures is such a different animal than options with different risks and margin requirements so I do not want lead anyone into futures if they are still learning options LOL.

We will see.

Phil


Quote from daytrader85:

Is there any way you could share on how you trade or what you use to trade ES?

Thanks.

Daytrader85
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