SPX Credit Spread Trader

Quote from Extractor:

Sam, I have only read the risk management chapter which Phil makes available free. It is worth the read, but he has very gratiously discussed a great deal of whatever could be offered in the book by answering every question thrown at him. The book is cheap on the net , so if your curious beyond this thread, buy it.Its got to be a better read than Maria Bartoromo or other CNBC authors!
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Thanks for the attempt at the review :D

It's not the money , It's the time wasted.

The style traded on this thread is a bit too aggresive for me but it has been FUN to watch you guys/gals when the heat has been turned up:D

I believe in selling the RIGHT market, NOT just selling "A Market" or a few indexs.

I am particuarly interested in his views on adjustments is there anything NEW or unique other then McMillans or Natenburg?
 
Sam, I look at it this way, if the adjustment adds to the risk, and deminishes the reward , it may be better to close and play another day. If however the ratio of risk to reward stays within reason and probability of success is higher , it is worth considering. Strategist and former pit trader from TOS, Tom Preston says if the adjusted position isnt one that you would have put on as a trade in the first place, then dont do it. What else are you going to talk about with adjustments, you will either buy or sell more options in hope of salvaging your trade, and it either makes sense to do it or it doesnt. Just my two pesos. ps. KISS is the name of the game
 
Quote from Extractor:

Sam, I look at it this way, if the adjustment adds to the risk, and deminishes the reward , it may be better to close and play another day. If however the ratio of risk to reward stays within reason and probability of success is higher , it is worth considering. Strategist and former pit trader from TOS, Tom Preston says if the adjusted position isnt one that you would have put on as a trade in the first place, then dont do it. What else are you going to talk about with adjustments, you will either buy or sell more options in hope of salvaging your trade, and it either makes sense to do it or it doesnt. Just my two pesos. ps. KISS is the name of the game
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I completely agree !

Thanks I find that reading too many trading books only confuses me and I'm trying to be very selective in my choices these days.

That being said I have grown to like Phil and I will read his book I just wanted some comments on it's content. :)
 
Do you guys think its signifcant that the SPX tested 1270 today, but closed at 1265? For the past several days its been nothing up, up, up and then closing near or at the high. Could this indicate that resistance is forming at 1270? It would sort of make sense in that many analysists and pundits have been predicting a 5% rise in the S&P by the end of the year-- which would be roughly 1270. We've reached it a month early, so I'm guessing many on the long side are getting out at 1270. What do you guys think? It'll be interesting to see how this plays out for the remainder. I currently have a bear call spread at 1285/1295, which I'll almost certainly have to adjust. But, I'm hoping we go sideways till expiration (LOL). :)
 
Wishing all of you a restful Thanksgiving from the snowy white state of Michigan.

In the spirit of Thanksgiving, let us remember those less fortunate and those who have provided us our freedoms.

M~
 
I don't recall him saying it was easy either. But I do recall that there were several here who were much less risk inclined than they shoulda been.

Let's get something straight...again...I've got nothing against OC. I think he does a good job leading some into this world. Look at the first 70 posts of this thread....I was nothing but encouragement for OC.

The issue that I had was with the "1 or 2 repairs per year" nonsense. I know from experience and from my long term P/L that that was a joke.

As per your question......I'm up way more than 100% this year. But I do that with many more styles than being short Gamma all year. You’re apparently having a good year as well. Good Job! This short –Gamma strategy is great.....until it ain’t The risk on it can be a serious detriment to your financial health.

Sitting tight and watching price move against you and then rolling higher into risk is a losers game. Be warned.....again.

Best,
Dr. Z




Quote from Extractor:

Doc, I dont recall Phil ever saying it was easy. He also stated that it is not a just sell the iron condor trade. It is one way of trading a market , when the market is right. Also , I would imagine that most traders here other than absolute rookies , utilize other trading strategies , and other markets. Phil seems to be having quite a good year, how about you?
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Good Man, the smaller the better in most cases where your R/R is way outta whack. Small returns add big time. Manage your losses and your wins will show up big time.

As far a posting is concerned.....

1st... I don't want to infringe on another's thread too much. I personally am not too much of a "journal type."

2nd...I'm trading all day and not too concerned with message boards.

Otherwise,
Good Luck


Quote from skanan:

Doc,

I agree that you'll need more than 1 or 2 "adjustments" a year.

There are not much trades here where experience traders post the real time trading action and discuss with us.
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Quote from Samson77:

Will none of you Phil (athropists) give me a decent review of the quality of Phils book?
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I have the book and feel that it was an excelent addition to my trading library. Recomend it to all traders.

George
 
Quote from Dr. Zhivodka:

I don't recall him saying it was easy either. But I do recall that there were several here who were much less risk inclined than they shoulda been.

Let's get something straight...again...I've got nothing against OC. I think he does a good job leading some into this world. Look at the first 70 posts of this thread....I was nothing but encouragement for OC.

The issue that I had was with the "1 or 2 repairs per year" nonsense. I know from experience and from my long term P/L that that was a joke.

As per your question......I'm up way more than 100% this year. But I do that with many more styles than being short Gamma all year. You’re apparently having a good year as well. Good Job! This short –Gamma strategy is great.....until it ain’t The risk on it can be a serious detriment to your financial health.

Sitting tight and watching price move against you and then rolling higher into risk is a losers game. Be warned.....again.

Best,
Dr. Z
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Dr. Z

You are a wise man !


George

Thanks for the opinion on the book.
 
Doc, I have to agree, that when the market is docile , these neg Gamma strategies can lull you into a false sense of security, and your caution is well advised, and maybe does need to be repeated often for everyones benefit. I do have to say that Phil handles this strategy really well when considering the magnitude of the risk to reward when using large margin as he does. I believe he considers his risk management plan assures him that loss of total margin would not be a factor, and as he stated many times this is only a portion of his total trading capital. For others , it is all their discretionary trading capital , and a catastrophic loss would put them out of business. It reminds me of the line in the movie Patton, when GC Scott talked about the victorious Roman conquerors returning home with their captives and spoils,and all the while a slave stood behind in the victors chariot continually whispering in his ear" sire all glory is fleeting" , and sometimes all profits are fleeting. So feel free to periodically wake us up here! Coach Phil , however , is giving us a great opportunity to observe someone who is really good at trading this strategy.
 
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