SPX Credit Spread Trader

Nothing has changed from what I described. What the discussion above was about is that sometimes the bid/ask you see on the screen is off from the actual tight bid/ask on the floor. The reason I was told is that the b/a on teh screen is the composite of all the MMs in SPX and since they are wide and varied it can result in a mid-point different than the actual best b/a. If you put on a position and it is just not getting filled, my advice is to call in and get a floor quote of the actual bid/ask to determine if they are off from the composite b/a quotes.

Unfortunately there is nothing I can see to get around this occasional problem. With OX or ToS you can call in to verify if your position is sitting there for a long time. One reason may be the composite quotes being a little off and calling in may allow you to adjust your limit price to get filled.

Take it slow as you said and trey and shave off the mid-point as we all are doing. If you got an order there for a few hours, then call in to see what info OX can give you on the floor quotes.


Quote from scoobie27:

Hi Coach, pls help.....

Not really understanding what you're describing about the bid ask problem in the few posts above. In previous posts months ago you've been describing your method of getting filled with OX spreads which I understood really well.

eg if the bid ask shown on OX is 0.25/0.85

I place my spread price at 0.55 (mid point) and wait for a fill.

If not I would shave a nickle or a dime towards the bid after a period of time has passed. Is this still how I can do it? Just a little confused with the -bidx discussed in the last few posts.

The reason Im asking is because I've only read up to page 90 and we're up to page 900 :p . So things may have changed alot since pg 90. Im behind by a few months but plan to be up to date in a month :) Ready to jump in soon as I've just transferred funds to OX from Aust. Looking forward to it but plan to be very conservative.

Thanks in advance for your help.
More...
 
May is coming on my radar and I first might try to get out of my put spreads at the 1225/1235 strikes to open up some margin room since I opened a large position. I am looking to only do put spreads since we have a bullish bias right now in the market. I will let you know what strikes I am considering. Off the top of my head 1230 and below look golden....

Quote from rdemyan:

Coach:

We're within your 45 day window for placing May trades. Are you considering any trades at this time and if so what?
More...
 
Quote from optioncoach:

I am looking to only do put spreads since we have a bullish bias right now in the market.
More...

I guess for every seller there is a buyer, eh? I am only looking for call spreads this month as i have a bearish bias. It's great that people have opposing views or we will never have a market :D
 
Basically whern I put on a partial hedge I am committed to the cost of the hedge as a sunk cost and have no problem letting it expire worthless if the market stays away from the PH (partial hedge) strike and the overall spreads are profitable.

If the market moves towards my PH, assuming I have long options and not spreads, I may roll it into a spread to remove the cost or a net credit and add another PH strike above or below that. If the PH has a nice profit, I may simply close it if I feel that my short spread strikes are in less danger due to shorter time to expiration or if support or resistance holds.

The banked profit can be relied upon to fund another PH if one is needed again or to allow me to close out a spread sooner than expected. For example if I sell a spread for $0.40 and it cost $0.10 to buy back, nice profits from a PH may allow me to get out at $0.10 instead of trying to squeeze out the extra nickle or dime.

This is more of a feel thing since hard and fast rules in these are hard to apply fast :). I add them when I feel some initial worry about the market move and my initial position is to ride it to expiration and consider it a sunk loss. Cost of insurance. That is why I determine a % amount of the credit I am willing to spend on insurance. Sometimes it is a fixed dollar amount. If I take in $15,000 in credit I may determine ahead of time that I would be willing to put up to $3,000 in a PH if needed.

Remember that I have my put spread partial hedge on and I am just letting it run. Most times I let it run. Once in a blue moon I may roll into spreads if not a spread already or take some profit if it is over $1,000 or so and I am no longer as concerned about my short strikes.

Quote from rdemyan:

Coach:

I posted earlier that I placed my first hedge in April. I purchased a 133 SPY Call to hedge my April SPX bear calls.

So, I'm thinking about exit strategies for this SPY hedge.

1) Let it expire, which is the strategy I planned to use when the hedge trade was first openend.
2) Sell the hedge to get what I can when I'm fairly certain that my short SPX strike will not be breached.
3) Only sell the SPY hedge if I close my SPX bear calls first.

I don't remember any posts (in this 800+ page thread) where you discuss your exit strategies for your hedges (but you probably did somewhere).

Thanks.
More...
 
ACTUALLY... the real beauty is that if we are selling OTM spreads, we both can be right at the same time ;).


Quote from rallymode:

I guess for every seller there is a buyer, eh? I am only looking for call spreads this month as i have a bearish bias. It's great that people have opposing views or we will never have a market :D
More...
 
Quote from optioncoach:

ACTUALLY... the real beauty is that if we are selling OTM spreads, we both can be right at the same time ;).
More...

ACTUALLY...the real beauty(for you anyway) is that if I AM RIGHT with my OTM positions, then you are way better off with your FOTM since you probably won;'t even need a hedge :D
 
Quote from optioncoach:

Nothing has changed from what I described. What the discussion above was about is that sometimes the bid/ask you see on the screen is off from the actual tight bid/ask on the floor. The reason I was told is that the b/a on teh screen is the composite of all the MMs in SPX and since they are wide and varied it can result in a mid-point different than the actual best b/a. If you put on a position and it is just not getting filled, my advice is to call in and get a floor quote of the actual bid/ask to determine if they are off from the composite b/a quotes.
More...

Thanks for your help again coach. Good to know things haven't changed from what Im familiar with. Interesting to note that the composite b/a is not the best because.....I may be wrong but I think OX promises something called NABBA or something like that. Anyway off to sleep again while you guys have all the fun :mad: No reply required....just my parting thoughts until I surface again with another question or a trade :)
 
It is not really an OX or ToS thing, it is the way SPX quotes are given since the CBOE has a monopoly on it and it is only in one market. The OX or ToS procedures of best bids or this NBBO I believe works when something is listed across several exchanges and the broker quotes the best bid and ask across those exchanges to get the best fill. Since only the CBOE lists SPX, you get a composite of all CBOE MMs quotes for SPX and the "bend-me-over" wide spreads.


Quote from scoobie27:

Thanks for your help again coach. Good to know things haven't changed from what Im familiar with. Interesting to note that the composite b/a is not the best because.....I may be wrong but I think OX promises something called NABBA or something like that. Anyway off to sleep again while you guys have all the fun :mad: No reply required....just my parting thoughts until I surface again with another question or a trade :)
More...
 
I would like to do a search of a key word on the contents of this thread through its print version.

However the print version of this 800-page thread does not workprobably 800 pages would be too many for the functionality.

Perhaps the thread should be sub-divided to a few ones with searchable size. TIA.
 
Not a bad idea but I have no control over the thread to break it down or move parts around. If there is something specific you are looking for, maybe we can help :D
 
You must log in or register to reply here.
Back
Top