SPX Credit Spread Trader

I saw what I thought was a good credit on the Feb 1355/1365 call spread quoted at .35/.40 so I sent an order for .35 (at the bid so I should get filled right away). I was busy for a while and checked on it 20 minutes later and it wasn't filled, I couldn't figure it out. I opened up the quotes for the legs and found out why:

1355 0x.40
1365 .05x.40

I knew it was too good to be true!

ryan
 
everyone does feel exposed...some more than others:eek: as momoney said coach is out today so you might want to bump your question when he gets back. I don't trade the oex however we did have a discussion which you might have read that a "good" IC will be beyond the straddle ATM (add both the atm put and call then the total of those pts is the distance of each short strike) coach goes much further some go out twice on the spx...don't think that would work for the oex. good trading to you
Quote from Trumpy:

oops - just realised the graph doesn't actually show the details of the IC which are:- OEX March 520/530/595/605

(PS did anyone else feel like they where about to make a complete fool of themeselves when they first started posting onto message boards? - I'll get over it, learning is more important then feeling exposed!)

M
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Trading through prop does not mean I become a market maker. I will stil have to trade you like you with direct access, just get better margin and haircuts.

Quote from skanan:

Coach,

When you go props, I assume you'll trade as B/D. Then you have to buy at ask and sell at bid. How would you deal with that on your current strategy where you can sell near the middle ? I think I might have misunderstand something here.

Thanks,
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Boxing your credit spread may simply lock in a loss of teh difference between the strikes minus the credit. Since the two positions are complementary I agree that the locked in loss of the spread could be the same loss as if you simply closed it at the same moment. Bottom line you can compare the two at the moment and find the least painless way to get out. A box is a better strategy to leg into for a profit, then to leg into to lock in a loss. This is all off the top of my head but i think it holds true.



Quote from Heatheranderson:

Coach
I was doing some research on the repair strategies and i came up with this BOX strategy. My head is spinning from the imagining all these outcomes. could you please walk me through?.

Lets take your example:
Credit spread of 1200/1190 PUTS when SPX is at 1260.Its falling and is close to 1200.I panicked and at this stage if i put in a CALL Credit spread of 1190/1200, will it stop the rapid loss of capital and lock in a small loss instead?.
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Coach:
I have been reading this thread for several months and want to thank you for all your input into the discussions. I would like to trade spreads but I need some basic education on performing technical analysis. Can you suggest a good basic book on the subject. Thanks again.
 
Murphy, Technical Analysis of the Financial Markets

You could buy a lot of books but this one covers all the major TA tools and is enough to give you the best overview. Once you go through it and find certain indicators you really like, you can noarrow your research and focus.

Glad you found use in our daily ramblings :)


Quote from JimPos:

Coach:
I have been reading this thread for several months and want to thank you for all your input into the discussions. I would like to trade spreads but I need some basic education on performing technical analysis. Can you suggest a good basic book on the subject. Thanks again.
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Quote from skdoyle1:

Anyone heard anything about this broker? 0.65/contract.
tradeking.com
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The option chains look like the one I see on OX, wonder if they use the same software for that part. The trading screen isn't too bad and the option strategy scan looks interesting. Can't beat that price. It would be great to hear from somebody who trades with them.

ryan
 
Quote from ryank:

The option chains look like the one I see on OX, wonder if they use the same software for that part. The trading screen isn't too bad and the option strategy scan looks interesting. Can't beat that price. It would be great to hear from somebody who trades with them.

ryan
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Quote from the webiste: "For option trades, we charge $4.95 per trade, plus 65 cents per contract. That’s it."

They are not that cheap after all.

The platfrom looks exactly like OX, only with different colors.
 
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