An evil mind would be looking for a SET about 6.5 pts lower give or take a smidge...
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
It is important to consider commissions but it should not be a key factor in risking a SET. If the 13 point cushion at the close of the market leads you decide that SET will not be an isse and you decide to take a chance on the SET that is fine, but NEVER due to commission costs to close a trade alone.
The reason I say this is because that way of thinking might keep you from closing the one time you should have and $750 in commissions costs which would still leave a net profit will look so much sweeter than a $5k loss---too late though.
Remember, you trade the way you train and you should train the way you want to trade (say that 10x fast!).
The reason I say this is because that way of thinking might keep you from closing the one time you should have and $750 in commissions costs which would still leave a net profit will look so much sweeter than a $5k loss---too late though.
Remember, you trade the way you train and you should train the way you want to trade (say that 10x fast!).
Don't get me wrong... I love ToS trading platform.... but with large number credit spread positions.... www.tradeking.com has done me justice. Good fills... .65/contract. At moments like this... ToS or anyone else will not be able to get inbetween the b/a any better than anyone else.... it's just too tight in these last few moments....
Just a Thought
Murray
Just a Thought
Murray
Right, Coach. I probably shouldn't use the word breakeven for what I was trying to convey.
Yeah, I made good money on those trades. I'll post results tomorrow, but so far, it'll be upwards of 6% on margin for the month of March.
You're absolutely right on the SET. We both know of someone who got buried in November on the SET, and he is quite an experienced trader. In Nov. the SET was much higher than the Thursday close. It just goes to show it can happen to anyone so why risk it esp. if you've already made a good profit.
Yeah, I made good money on those trades. I'll post results tomorrow, but so far, it'll be upwards of 6% on margin for the month of March.
You're absolutely right on the SET. We both know of someone who got buried in November on the SET, and he is quite an experienced trader. In Nov. the SET was much higher than the Thursday close. It just goes to show it can happen to anyone so why risk it esp. if you've already made a good profit.
Quote from optioncoach:
Ahhh when you say breakeven it implies you made or lost no money on the trade. I assume you still made money on those spreads (i.e. sold them for a lot more than the $0.15 to close).
Always a good idea to take the profit and avoid SET issues. Remember I always said that SET is not a big deal at all, just close out the position by Thursday and you never have to even worry about SET
Judging from those who have posted it seems all have done well in March, which makes sense given the range we have been trading in.
I only have the diagonal on for APR and will have plenty of margin to grab APRIL positions. I have to amdit with this new bullishness in the market I am a little wary of selling call spreads so I might just grab some puts way OTM on a down dip and let it ride.
I only have the diagonal on for APR and will have plenty of margin to grab APRIL positions. I have to amdit with this new bullishness in the market I am a little wary of selling call spreads so I might just grab some puts way OTM on a down dip and let it ride.
sk:
It's a matter of perspective for me. I blew up my account last summer, so now I'm much more careful and since I already had a very good profit, why risk it. I'll gladly give up 75 to 100 on 10 lots to not have to worry about losing thousands.
Also, in the last year I believe there have been at least two months where the SET was more than 13 points higher than the Thursday close (I think last June it was close to 20 points). Given that this is quadruple witching, we are at new highs in the last six years and there seems to be an unreasonably high amount of bullish sentiment, it just didn't seem to me to be worth not bailing out of all short positions that were 20 points or so away.
You might want to check out the SET numbers over the last year. I think you'll be surprised at what can happen.
It's a matter of perspective for me. I blew up my account last summer, so now I'm much more careful and since I already had a very good profit, why risk it. I'll gladly give up 75 to 100 on 10 lots to not have to worry about losing thousands.
Also, in the last year I believe there have been at least two months where the SET was more than 13 points higher than the Thursday close (I think last June it was close to 20 points). Given that this is quadruple witching, we are at new highs in the last six years and there seems to be an unreasonably high amount of bullish sentiment, it just didn't seem to me to be worth not bailing out of all short positions that were 20 points or so away.
You might want to check out the SET numbers over the last year. I think you'll be surprised at what can happen.
Options have taught me one lesson - it pays very often to be contrarian.
As long as pricing is favorable, I would get in. BTW - calls are easier to hedge as upward moves are not so violent as those going south. The problem is to sell them well - getting good fills, relatively far OTM. Sometimes I calculate Ansbacher Index for this, just for orientation.
Well the 1365 or 1370 strikes I wanted were being lockedup by the MMs and I was not happy with the premium, especially since the skew really works against you. If we have another pop, I can grab some 1370s and let them sit.
We shall see..
We shall see..
There is $250 that is a given because you have to put on a trade in order to make any profit at all. The other $250 only occurs if you have to get out of the credit spread before expiration. So I think that's why we're only looking at this "discretionary" $250.
Round trip would be $500 for the example you cited.
Round trip would be $500 for the example you cited.