SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
When we talk about pit traded, we tend to think the (grain) pits in CBOT which you can not trade from IB. CBOE is several years ahead of CBOT when it comes to make their market more electronically accessible. You can trade all CBOE contracts from IB.
Yes contracts are fungible among AMEX,CBOE, ISE. Again, outside of CBOT and CME, people might not even be able to understand what fungible means. CBOT was very out dated but is doing much better after the Eurex tried to get to its turf.
I always trade through SMART and can not think any situation where I need to have my order going to, say ISE.
I always use SMART and have little more orders get filled at ISE than CBOE. I would believe SMART had picked the better price for me most times, if not all the times. But I don't know it for sure. How do we know which one has better price. Is it a matter of personal experience/opinion, or it is a matter of fact?
I have been testing the idea that on a severe move, one could use E-mini futures to hedge a spread. However, I do not see that is the best approach. It is always the best approach to simply push your strikes out further or close out and take the small loss now and prepare for the next position.
The only time I can see using futures is a 9/11 type of event where the market has stopped. One can short futures to hedge against a put spread while waiting for trading on options to resume.
I think that it is still a break glass in case of emergency measure only.
Phil
The only time I can see using futures is a 9/11 type of event where the market has stopped. One can short futures to hedge against a put spread while waiting for trading on options to resume.
I think that it is still a break glass in case of emergency measure only.
Phil
Some people do just that (ES for SPX, NQ for NDX) while others use options of different strike or expiration date to hedge.
When I jump in is mainly a timing issue with me. August is still 56 days to expiration and that is too far for me. Also, August does not have all the strike available yet. Further out months usually have 25-point spread strikes. When the current month (June) expires, then August starts adding more strikes at $5.00 intervals but as you go OTM it is still $25 apart.
SO basically my attention is raised when the option is at 45 days to expiration or less. Not a conrete rule but one I try and stick with. TIme decay picks up in this time period and it is far enough in time to get good premium but not so far to give the index a lot of time to move against me.
I am usually a month ahead as you can tell from my positions. I closed my Juune positions at the beginning of June and rolled into July. By the beginning of July I should be out of all my July positions and then start rolling into August. This way I always keep the money moving forward and take advantage of the premiums.
August looks good premium wise but will feel even better in a another week or two.
Phil
SO basically my attention is raised when the option is at 45 days to expiration or less. Not a conrete rule but one I try and stick with. TIme decay picks up in this time period and it is far enough in time to get good premium but not so far to give the index a lot of time to move against me.
I am usually a month ahead as you can tell from my positions. I closed my Juune positions at the beginning of June and rolled into July. By the beginning of July I should be out of all my July positions and then start rolling into August. This way I always keep the money moving forward and take advantage of the premiums.
August looks good premium wise but will feel even better in a another week or two.
Phil