Nice @#$%ing fill LOL.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Tradeking.com update:
I signed up earlier this week to check them out (I haven't funded my account yet). Lots of cool tools to use. There is one nagging problem I have had since I signed up, the option chain page for SPX shows 0 for all deltas and IV. I also can't get a chart for the SPX. I have contacted them once each day and they say it is a problem with one of their vendors and they are working on it. I can understand having a problem, but for 3 days? The site looks great, great tools, great price but I'm not sure I'm ready to send them my money yet. Anybody else try them out yet?
ryan
I signed up earlier this week to check them out (I haven't funded my account yet). Lots of cool tools to use. There is one nagging problem I have had since I signed up, the option chain page for SPX shows 0 for all deltas and IV. I also can't get a chart for the SPX. I have contacted them once each day and they say it is a problem with one of their vendors and they are working on it. I can understand having a problem, but for 3 days? The site looks great, great tools, great price but I'm not sure I'm ready to send them my money yet. Anybody else try them out yet?
ryan
sure...when I initially looked at doing this..I'm trading 50 contracts now on the credit spread so I would buy 10 contracts on the single...so lets say I decide to sell the Mar 1200 puts today I would buy 10 1245 puts. (if you were selling 10 you would buy 2)
what I figured is the spread just about pays for the "hedge" and if I leg into it I would have change left over. I'm putting hedge in quotes because I don't know what else to call it...I don't consider it so much as a hedge but an actual play. sorry if I don't make sense
That is what you get when you turn your back on OX and ToS LOL.
Quote from DonnaV:
sure...when I initially looked at doing this..I'm trading 50 contracts now on the credit spread so I would buy 10 contracts on the single...so lets say I decide to sell the Mar 1200 puts today I would buy 10 1245 puts. (if you were selling 10 you would buy 2)
what I figured is the spread just about pays for the "hedge" and if I leg into it I would have change left over. I'm putting hedge in quotes because I don't know what else to call it...I don't consider it so much as a hedge but an actual play. sorry if I don't make sense
So you bought the 1175 Mar put for $2.10 x 50 contracts. Using the mid for argument sake on the 1200 and 1245 today, you would sell the 50 contracts of the 1200 for 5.00 and buy 10 contracts of the 1245 for 13.20. So you have a credit from the bull put spread of $14500 and then you "hedge" down to a credit of $1300. Is this what you are talking about doing?
ryan
Mucho math errors in my Prego Fly example I just posted so I deleted it to avoid confusion. sorry for those who read it already 
. Will try it again.
. Will try it again.Donna,
Sounds like a plan. Make a play for the expected 1 sigma move with long options and also gain from the expected <2 sigma move with the short options/credit spread.
Potential convergence gains as Riskarb puts it. You find yourself wanting the underlying to move towards your short position....but not too much! The positive benefits are you get some convexity to hedge your credit spread (intended or not) PLUS you get potentially larger profit. It's difficult to choose the right strangle width(Riskarb suggests straddle which I would be tempted to leg into a short butterfly as the underlying moves) and ratio of inner strangle to outer IC but you've come up with a suggestion. Let's see how it plays out.
I'll be interested to see how you choose to handle profit taking on the long option(s) e.g. whether you leg into a debit spread or just let it run.
Good luck and thanks for the info.
MoMoney.
PS.
Surf Report thread is catching up in no. of replies, so I'm doing my bit here to keep this in front LOL.
Sounds like a plan. Make a play for the expected 1 sigma move with long options and also gain from the expected <2 sigma move with the short options/credit spread.
Potential convergence gains as Riskarb puts it. You find yourself wanting the underlying to move towards your short position....but not too much! The positive benefits are you get some convexity to hedge your credit spread (intended or not) PLUS you get potentially larger profit. It's difficult to choose the right strangle width(Riskarb suggests straddle which I would be tempted to leg into a short butterfly as the underlying moves) and ratio of inner strangle to outer IC but you've come up with a suggestion. Let's see how it plays out.
I'll be interested to see how you choose to handle profit taking on the long option(s) e.g. whether you leg into a debit spread or just let it run.
Good luck and thanks for the info.
MoMoney.
PS.
Surf Report thread is catching up in no. of replies, so I'm doing my bit here to keep this in front LOL.
Here is the SPX chart showing where we are now at a crucial support area. Chart looking like complex H&S top so what we do now will tell us a lot. Staying in the channel or higher will keep bullish bias alive. Breaking down and dropping will mark a market top and then we have to start worrying about support levels and how far the market can fall.