SPX Credit Spread Trader

Quote from CashCache:

My line in the sand is 1295, but I make it a point not to close down or roll until after 2:30 ET. By then it seems the market makes up its mind on the direction.

If the SPX closes above 1295 today, it is going to be a little expensive to get out of my 1310/1320 considering such little time left in this month, and April just too far away from me to comfortably roll to. My only choice now (as I see it) is to shut it down.

I was able to pick up a 1330/1340 today for a .50 credit, so that will offset my debit should I close down the 1310/1320 today.

Any suggestions?

Thanks,

-Cash
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pass the hat for coach to do a bull put....say 1275/1285 :)
 
Pimp!

I reposted my positions a few posts above which lists the IC. My short call strike in the IC is 1335 so I still have plenty of room as of today. So for right now I am not doing any adjustments. I did add 100 MAR XSP 133 Calls as a partial hedge. I use the 15 point line as a crap or get off the pot marker but start to consider hedges even as we get close to 20 points away. This allows me to plan out adjustments calmly rather than panicking with 3 points of cushion to go!

I do not have a preference on strike width on the IC because I rarely open an IC as one position. If I end up in an IC it is because I have legged into it and the strike width depends on what is going on in the market. The current strike width is well over 100 points and that is a nice comfortable range for me ;).

Quote from volatilitypimp:

Hey coach. I can't seem to find your 175 lot Mar IC, looking back. Where is your short call strike? Also, with 17 days left you will do some kung foo adjustments 15 points from your short strike? Do you allow spx to get closer as exp. nears? I'm trying to get a feel for your risk management.

Also, do you have any guidelines/preference for strike width on buying the wings on the IC?

Thanks for all your input.
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REPOSTING OF POSITION FOR REFERENCE:


My Current Positions:

- 150 SPX 1185/1195 BOX Spreads (something funny about saying the words "box" and "spread" in the same sentence.)

Net Loss = $9,000 or $0.60


- 175 MAR SPX Iron Condors 1165/1180/1335/1350 @ $1.15

Credit = $20,125
Risk = $242,375
Return = 8.3%

Partial Hedge: 100 MAR XSP $133 Calls @ $0.15 or $1,500.

NET RETURN (including BOX adjustment and partial hedge) = 3.97% for 1 month.
 
I haven't looked at potential bull put positions, but typically if you roll the bear call up, often one looks to get out of existing bull puts (assuming a reasonable percentage of the initial credit is banked; for me that's typically 75%) and roll up to another bull put to take in additional credit.

However, as Coach pointed out to me last week, March is triple witching option expiration. So I'd be prepared to get out of potentially all positions just before expiration esp. if any short strikes are within 15 to 20 points of where the SPX is on Thursday.


Quote from CashCache:

My line in the sand is 1295, but I make it a point not to close down or roll until after 2:30 ET. By then it seems the market makes up its mind on the direction.

If the SPX closes above 1295 today, it is going to be a little expensive to get out of my 1310/1320 considering such little time left in this month, and April just too far away from me to comfortably roll to. My only choice now (as I see it) is to shut it down.

I was able to pick up a 1330/1340 today for a .50 credit, so that will offset my debit should I close down the 1310/1320 today.

Any suggestions?

Thanks,

-Cash
More...
 
Oh sorry.... I usually use 5, 10 and 15-point wide strikes for the credit spreads. Which one depends on the credits and b/a spreads and the returns but I am not married to one specifically.

Quote from volatilitypimp:

oops, I meant to say your strike width on each credit spread. eg. sold 1335 call bot 1340call, or 1350call
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