SPX Credit Spread Trader

Cache Landing · Mar 17, 2006

Quote from Opra:

That's what I noticed yesterday, 131.50, and was patting myself on the back for having closed it end of last week. Who woulda thought...

Thanks again Cache for SPY div info.

One thing you might consider is trading XSP instead of SPY. I don't think they are as heavily traded but they are European style so you don't have to worry about getting assigned.

ChrisM · Mar 17, 2006

Quote from Cache Landing:

One thing you might consider is trading XSP instead of SPY. I don't think they are as heavily traded but they are European style so you don't have to worry about getting assigned.

As multiplier is 100, this makes them acutally smaller than ES - right ?

rdemyan · Mar 17, 2006

ToS really is the best for us retail traders.

But, you should know that their web-trading platform is poor compared to OX. If you travel and can't connect with the platform (the Java download to your PC), the web-based trading is practically useless. You can monitor positions okay though.

Since I travel alot, I call in rather than deal with trying to place trades using web-based trading. ToS brokers are great and it doesn't cost me any extra to place trades over the phone versus the software. Plus I've noticed that when I tell them that I don't have access to the downloaded platform, they tend to be even more helpful, because they know how poor the web-based trading system is.

Quote from ryank:

I had my brand new TOS software up today. It made a funny noise and when I looked up there was a little box showing the settlement for SPX, NDX and some others. That saves me from checking the CBOE website every now and then on expiration day.

ryan

El OchoCinco · Mar 17, 2006

XSP is just the SPX/10 so 1300 is 130 on XSP with the $100 multiplier, i.e. $100 a point. Since the ES is $50 a point it is smaller per point but if you really compare the two, a point on XSP is 10 points on the ES so the values are different. But since their multiplier is different it is hard to compare.

Quote from ChrisM:

As multiplier is 100, this makes them acutally smaller than ES - right ?

ryank · Mar 17, 2006

Quote from rdemyan:

That's one of the really good things about a forum like this. If people share, then you're not stuck with trying to make decisions in a vacuum and you get different perspectives. But each of us will need to make our own adjustments commensurate with our risk tolerances.

I like Coach's take on it a while back: This is fun as shit!

I keep looking at the prego fly but need to work out the margin required (still learning TOS, I'm sure the info is there somewhere). I'm also not sure it is that great of a hedge at this stage in the game according to the risk chart I am looking at. My profit zone is then between 1320 and 1350 (roughly). That is figured using a bull call spread of 1310/1345. I would still have a large loss if we go past 1345 but if we stay over 1325 and below 1345 my profit would be very large (relative to my initial credit from the call spread).

Lots of things to look over this weekend I guess. Kind of sick that I am looking forward to it isn't it?

ryan

RichardRimes · Mar 17, 2006

Quote from rdemyan:

I'm also at the same level as you and Ryan. I have a 1345 short strike for April.

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So, I'll be interested to see what you two are up to and I'll post anything I do as well. Also, I guess Donna is in the boat with us, so it'll be interesting to see what she does.

That's one of the really good things about a forum like this. If people share, then you're not stuck with trying to make decisions in a vacuum and you get different perspectives. But each of us will need to make our own adjustments commensurate with our risk tolerances.

Water is a little higher in MY boat:eek: 1340! I'm thinking IF I adjust it will be extending the puts to something like 1225 and closing the calls altogether...even if it (the net) cost a buck to do it...my credit for April was very healthy...2.5 so I can affort to give some back...coach what was your paypal account

?

Cache Landing · Mar 17, 2006

Quote from ChrisM:

As multiplier is 100, this makes them acutally smaller than ES - right ?

Very similar to SPY with some slight differences that I think make it more attractive.

Opra · Mar 17, 2006

Quote from Cache Landing:

One thing you might consider is trading XSP instead of SPY. I don't think they are as heavily traded but they are European style so you don't have to worry about getting assigned.

Yes, I do. In fact, still short XSP 124 put in a bull vert (yeah, kind of mixed up, SPY/XSP). But I tend to think that becaused SPY options are llisted in multiple exchanges, it is probably more liquid. But I think I shorted XSP put instead of SPY because I could get a nickle more at the time.

piccon · Mar 17, 2006

My strategy doesn't allow me to hedge My Bear Call when market is or about to be overbought. It doesn't make sense. That's why I am hanging in there. I will wait for some pull back, Have a Bull put and buy some SPY to hedge this 1340. But doing it right now, at the top is ridiculous. Trading is a buseness; I am in it to make money not to lose; That's why I have to make the right decision not acting with emotion.

You look at your account and you see that you are down 4k, 5k; If we have two down days, this money will come back.

JMHO

Quote from rdemyan:

I'm also at the same level as you and Ryan. I have a 1345 short strike for April.

I'm considering some hedge strategies that I've never tried before: box, prego fly, etc. So it makes sense to start considering how to do these now so that panic doesn't set in when the time comes. I've never been that big a fan of just rolling up because you can seldom roll up more than ten points without losing most of your initial credit. If the train is moving fast, 10 points is nothing.

So, I'll be interested to see what you two are up to and I'll post anything I do as well. Also, I guess Donna is in the boat with us, so it'll be interesting to see what she does.

That's one of the really good things about a forum like this. If people share, then you're not stuck with trying to make decisions in a vacuum and you get different perspectives. But each of us will need to make our own adjustments commensurate with our risk tolerances.

ChrisM · Mar 17, 2006

Quote from optioncoach:

XSP is just the SPX/10 so 1300 is 130 on XSP with the $100 multiplier, i.e. $100 a point. Since the ES is $50 a point it is smaller per point but if you really compare the two, a point on XSP is 10 points on the ES so the values are different. But since their multiplier is different it is hard to compare.

Coach,

right, similar not identical. But 130 SPY is not that far from ES 1300 ? Thus hypothetical unit contract SPY is 100*130=13000 while same ES is 50*1300=130000/2=65000.

or ES/SPY=10 ESop/SPYop=50/100=0.5

10*0.5=5

Even with margin for roughness of this calculation, it still makes ES few times (about 5) bigger.