SPX Credit Spread Trader

Quote from optioncoach:

Added some call spreads to my put spreads for MAY for an Iron Condor. I think we have some upside but I chose the 1370 strike for my short calls to give me a nice cushion. Sold 500 of teh 1370/1380 Call Spreads for $0.20. Basically I recoup the cost of my SPY Put and VIX Call hedges and put more money in my pocket potentially at expiration.

REVISED POSITIONS:


MAY POSITIONS


-500 SPX MAY 1215/1225/1370/1380 Iron Condors @ $0.60

Credit = $30,000
Risk = $480,000
Return = 6.25%

Long 100 VIX MAY 20.00 Calls @ $0.20
Cost = $2,000

Long 50 VIX MAY 15.0 Calls @ $0.62
Cost = $3,100

APRIL POSITIONS

SPX CALL DIAGONAL SPREAD:

- 8 SPX APR 1340 Calls @ $4.70
+ 10 SPX MAY 1375 Calls @ $3.10

Initial Net Credit = $660

Closed for net credit of $815.25


SPX BULL PUT SPREAD:

- 350 SPX APR 1225/1235 Put Spreads @ $0.35

Net Credit = $12,250

Closed for net credit of $0.15 or $5,250



PUT SPREAD PARTIAL HEDGE:

+ 100 SPY APR 126/125 Put Spreads @ $0.10

Net Debit = $1,000

Assumed closed for $1,000 loss
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Phil,

Forgive me, I haven't read the last 100 pages of this thread but I skimmed this over quickly and I started seeing images from my childhood when I saw that vertical you sold for .20. In other words, I was having a near death experience. LOL.

I know we have discussed this before. But have you honestly thought about buying that 1370/1380 call spread for .20? I know you get hung up on the debit vs credit mentality which you really should not.

I want you you to think about this before you respond. A .20 spread is basically free. Almost no cost to it. It's a lottery ticket that will pay off huge a few times a year and maybe even half the time allow you to flip it for .50 to a buck. Not only that, but you would be risking only 30k instead of 480k. And your upside would be close to a half a million vs 30k which in reality will be about 10k if you close it early. Now, here is the added kicker. In your haircut account, this position will cost you very little to hold. In fact, if you do the spread on both sides it will cost you nothing to hold it!!!!. You could theoretically do the trade much larger even. Of course, I'm not suggesting that.

I know I made a big fuss about this over on the writing options for a living thread and then that thread kind of got out of hand. But the point is still valid. Debit and credit spreads trade are the same thing. There really is no theta on the spread. It's an illusion. A .20 spread doesn't decay neither does a .20 call or put. They stay bid there for 3 or 4 weeks.

I know the whole idea here on this journal is to highlight the merits of credit spreads and capturing theta so to speak. But theta really doesn't exist in this sense.

I honestly believe if you bought the credit spread for .20 vs selling it, over the long run you would do much much better. Why? Because when you sell the spread you get all nervous when the mkt starts moving and you start f*cking with it. You slowly but surely eat into your credit. If you were long the spread, after a large move, you would simply take it off for a profit. And you would sleep much better at night. And you could really put that haircut to work!

I want you to read this over a few times before you respond. Think about what I am saying.
 
Quote from Sailing:


We were looking to sell calendars into anytype of volatility movement, but it really didn't happen soon enough, so now.. it's expire and sell a short strangle to form a condor. Possibly leg into each side as Delta allows.

Murray
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[/B][/QUOTE]

Murray and Coach,

Can you be sure to post when you do the May Calendar. I'm interested in following this. :)
 
futzing for ten min trying to copy a picture of the oscillator but can't...still in the oversold territory so there is room upside..I think those of us short calls in May are going to have to sweat out abt 10 days at least...however at least futures dropping.
 
Quote from DonnaV:

futzing for ten min trying to copy a picture of the oscillator but can't...still in the oversold territory so there is room upside..I think those of us short calls in May are going to have to sweat out abt 10 days at least...however at least futures dropping.
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The futures were up pretty good this morning but have been slowly dropping since the CPI came out. I wasn't able to get any fills on my call spreads yesterday so no sweating for me on the upside yet. :D

ryan
 
Quote from DonnaV:

futzing for ten min trying to copy a picture of the oscillator but can't...still in the oversold territory so there is room upside..I think those of us short calls in May are going to have to sweat out abt 10 days at least...however at least futures dropping.
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You must be using a weekly or > on that chart. I can't imagine a daily oscillator remaining oversold on this week's action.
 
I am not in any May yet because I am still nursing some of my April

OEX 595
RUT 780

Let's Pray

Quote from ryank:

The futures were up pretty good this morning but have been slowly dropping since the CPI came out. I wasn't able to get any fills on my call spreads yesterday so no sweating for me on the upside yet. :D

ryan
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I absolutely need a nothing or down day with my holdings

15 OEX 595/605
15 OEX 600/605
25 OEX 605/610
25 OEX 575/570
15 RUT 780/790
15 RUT 720/710
13 SPX 1340/1350

Hedges: 1 RUT 770 call
8 IWM 77 call
5 OEX 595 call


With 2 days to go, I wouldn't complain if we got a down day today and enjoy some more Theta

Quote from piccon:

I am not in any May yet because I am still nursing some of my April

OEX 595
RUT 780

Let's Pray
More...
 
Just how many times can the market rally based on the same old "we're almost done" line from the Fed... it's already been 4 times now...


Quote from ryank:

The futures were up pretty good this morning but have been slowly dropping since the CPI came out. I wasn't able to get any fills on my call spreads yesterday so no sweating for me on the upside yet. :D

ryan
More...
 
Quote from piccon:

I absolutely need a nothing or down day with my holdings

15 OEX 595/605
15 OEX 600/605
25 OEX 605/610
25 OEX 575/570
15 RUT 780/790
15 RUT 720/710
13 SPX 1340/1350

Hedges: 1 RUT 770 call
8 IWM 77 call
5 OEX 595 call


With 2 days to go, I wouldn't complain if we got a down day today and enjoy some more Theta
More...

I actually had some SPX 1320/1330 opened for a $2.70 credit. I thought they were going to be safe until yesterday. I took the opportunity to get out of them this morning. Bought them back for 0.50, so overall it was a pretty good trade. But I'm bummed that I had to give up that extra 0.50
 
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