SPX Credit Spread Trader

[Cache Landing]

Quote from rallymode:

Just dont forget to send me my cut on that mrvl trade. That is if you make any money, if you lose then i dont know you dude

Up so far. I was able to get the bear call in time before the big drop yesterday too, so the pullback didn't take any of my profits away.

 

[rdemyan]

Rich:

You might want to consider a ToS account. I made the switch back in October or November and others have as well. You can see from the posts in this forum that we all pretty much feel that ToS is superior to OX. One caveat, if you rely only on a web-base platform, i.e. you can't download the ToS desktop platform, then ToS is not as good as OX (the ToS web-based trading is very poor relative to their desktop platform). However, broker assistance seems to be quite a bit better with ToS than OX. Personally, I still have both accounts but have virtually ceased trading in the OX account.

Something to consider and there are plenty of posts here regarding ToS/OX/IB that you may want to wade through.

Quote from rsflint:

Thanks for the question rdemyan. On Monday 3/20 just after March options expired, I tried to get in on a full Iron Condor via OX but didn't get filled. So I decided to leg in. On Tuesday March 21, got filled on the PUT side -- then Wednesday March 22, got filled on the CALL side. A friend of mine got filled 1360/1370 for about the same credit I believe Monday 3/20..I had to go a little tighter because SPX settled down some by Wednesday 3/22.

Rookie Rich

 

[rdemyan]

VP:

I sort of agree with you on the TA part in that I don't think it is as critical for FOTM ICs. However, Rally has got me thinking about the value of timing the selling of credit spreads when the SPX is trading in a channel. I followed his timing strategy for May and got some nice credits on my SPX bear calls (1370/1385).

However, I would say one needs to ask the question:

"To IC or not to IC"

In other words, there are times when it seems to make less sense to do both credit spreads (bear call and bull put) because the market has a strong directional bias. Last November/December was a good example. Coach warned us about the market historically going up and he only did bull puts. I did FOTM bear calls and bull puts and was forced to adjust my bear calls and close early for overall losses (small but a loss nevertheless). Would have been better for my overall portfolio and stress level if I had just stayed away.

Quote from volatilitypimp:

I disagree with this mode of thinking in order to be successful with iron condors. The whole point of an iron condor in my opinion is to not care that much as to the direction, just as long as it stays within your predetermined range for as long as you hold the position.

Me personally, I usually put the whole thing on in one day and hope to remove it or let it expire, earning max credit.

I think people are more or less spinning their wheels trying to determine market direction for IC's. Honestly, I put the IC on every month without an ounce of TA, and I'm sure I do as well as most technicians. of course speaking ecclesiatically, there's a time for everything, and TA is better suited for directional trades(imo).

I just can't see TA being important for this strategy. As long as your spreads are 1 sigma or greater, you can expect to adjust roughly one out of four times as a general guideline.

For fear of raising the TA sycophant's ire, i won't comment further.

 

[volatilitypimp]

Quote from rdemyan:

VP:

I sort of agree with you on the TA part in that I don't think it is as critical for FOTM ICs. However, Rally has got me thinking about the value of timing the selling of credit spreads when the SPX is trading in a channel. I followed his timing strategy for May and got some nice credits on my SPX bear calls (1370/1385).

However, I would say one needs to ask the question:

"To IC or not to IC"

In other words, there are times when it seems to make less sense to do both credit spreads (bear call and bull put) because the market has a strong directional bias. Last November/December was a good example. Coach warned us about the market historically going up and he only did bull puts. I did FOTM bear calls and bull puts and was forced to adjust my bear calls and close early for overall losses (small but a loss nevertheless). Would have been better for my overall portfolio and stress level if I had just stayed away.

Agreed. There's no cookie cutter way to put these things on. myriad possibilities and such. for me, it's easier to leg in all 4 spreads in 15 minutes or less. I guess it's a matter of being mechanical about it and not bringing in my market opinion.

Actually I do it both ways. last month i had aggressive 1270p/1260p spx spread because I was bullish. I then decided to get greedy and sell an aggresive call side 1315c/1325c. mistake #1. mistake #2, could've bot back call side near the close for .35 bid .50 offered. I decided to take my chances with SET. lesson learned.

 

[rdemyan]

Hope you didn't have too many contracts on.

Looking at the SET vs Thursday close spreadsheet that I posted, it looks like it's almost a sure thing that the SET won't close higher by more than 15 points (at least based on the 8 years of data). However, the SPX could finish much lower. The biggest drop was just under 45 points which was about a -4.6% difference between the Thursday close and the SET.

Quote from volatilitypimp:

Agreed. There's no cookie cutter way to put these things on. myriad possibilities and such. for me, it's easier to leg in all 4 spreads in 15 minutes or less. I guess it's a matter of being mechanical about it and not bringing in my market opinion.

Actually I do it both ways. last month i had aggressive 1270p/1260p spx spread because I was bullish. I then decided to get greedy and sell an aggresive call side 1315c/1325c. mistake #1. mistake #2, could've bot back call side near the close for .35 bid .50 offered. I decided to take my chances with SET. lesson learned.

 

[volatilitypimp]

Not many contracts no. But it did wipe out all of my gains YTD. I was almost white with rage on friday. rookie mistake, I was too sloppy with risk management, I have learned a great deal from this incident.

 

[piccon]

Discipline is key PIMP. Me personally I select my series of strikes 20 to 25 trading days remaining.

Don't be running for premium. Stick to your discipline and be patient. I like to wait and wait until I get what I want. Cash is king. I am not in a rush of being filled.

Sorry for your lost. I am YTD 18.5% up and I am not looking forward to giving it back after all the cold sweats I had.

If I get what I want at the strike I am comfortable, I am ready to go; otherwise I will sit back and relax and wait for next opportunities.

Lessons I learned: The market moves back and forth; discipline is key.

Good luck

Quote from volatilitypimp:

Not many contracts no. But it did wipe out all of my gains YTD. I was almost white with rage on friday. rookie mistake, I was too sloppy with risk management, I have learned a great deal from this incident.

 

[rallymode]

Quote from piccon:



Don't be running for premium. Stick to your discipline and be patient. I like to wait and wait until I get what I want. Cash is king. I am not in a rush of being filled.

I agree 100%. If you base your trading style around the mentality that missed opportunity is better than lost money you will do so much better over the long haul.

 

[rallymode]

Quote from Cache Landing:

Up so far. I was able to get the bear call in time before the big drop yesterday too, so the pullback didn't take any of my profits away.

Good timing. I on the other hand did not do too well in my aggressive port this month. Barely broke even. The kicker was my BRCM 42.5/45/47.5 FLY. I chickened out on thu afternoon right before the report with BRCM at 46. Thought, the stock would move big and since i had alot of contracts on the line i closed at 10% gain which broke me even for the month. Had i waited i could've sold for 400% profit FRI morning since BRCM didnt move at the open, so i got pissed and took FRI off. Talk about bad timing :eek:

 

[andysmith]

I've done things like this too. All it would have taken to avoid this would be another pair of eyes (spouse, friend, co-trader), who just said "Back off, too much risk...". This type of judgement slip, even though rare, is a major downside to trading alone...

Quote from volatilitypimp:

Not many contracts no. But it did wipe out all of my gains YTD. I was almost white with rage on friday. rookie mistake, I was too sloppy with risk management, I have learned a great deal from this incident.