SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
There's no problem at all. There's no criticism either.
Just pointing out that there are more efficient ways to do this strategy.
re arbitrage: Hart9000 said he used the SPX because of the nice OTP prems. I simply pointed out that if he looked he'd find the same prems in other more efficient instruments when normalized for contract size and I.V.
Just pointing out that there are more efficient ways to do this strategy.
re arbitrage: Hart9000 said he used the SPX because of the nice OTP prems. I simply pointed out that if he looked he'd find the same prems in other more efficient instruments when normalized for contract size and I.V.
This is my point. It's highly highly unlikey that you could get that .65 cent spread right now. You may ...but over the course of a trading career you won't
This is due to the SPX being exclusively list on the CBOE. They have no incentive to be competitive.
BTW: now it's .50...and you still won't get that
Further, it's been pointed out that liquidity is an advantage for the SPX over other instruments. It is ture that the SPX has as much liquidity as you and I put togther could ever want. But that liquidity doesn't exsit at the "mid-point." One is gonna have pay up big time for that.
That's not always true with other instruments.
Not contentious....just facts.
This is due to the SPX being exclusively list on the CBOE. They have no incentive to be competitive.
BTW: now it's .50...and you still won't get that
Further, it's been pointed out that liquidity is an advantage for the SPX over other instruments. It is ture that the SPX has as much liquidity as you and I put togther could ever want. But that liquidity doesn't exsit at the "mid-point." One is gonna have pay up big time for that.
That's not always true with other instruments.
Not contentious....just facts.
Okay. So if premiums are relatively the same across all markets and if the SPX is not competitive due to being listed exclusively on the CBOE (both statements make sense on the surface), which indices do you recommend trading credit spreads on. Or do you only advocate credit spreads on stocks?
Look forward to your response. It seems like you have good and valuable experience to contribute that we all good benefit from.
Thanks.
Look forward to your response. It seems like you have good and valuable experience to contribute that we all good benefit from.
Thanks.
You do realize of course that you have to normalize for contract differentials between the two instruments?
Plus, the spread is going off at .55 and there no liquidity even there.
THis mid-point stuff is a strange concept that one should not take too seriously. Or you'll rudely awakened when you find out your wrong on the trade and you're trying get out. Then the "Mid-point" will be nothing but a pleasent memory.
Plus, the spread is going off at .55 and there no liquidity even there.
THis mid-point stuff is a strange concept that one should not take too seriously. Or you'll rudely awakened when you find out your wrong on the trade and you're trying get out. Then the "Mid-point" will be nothing but a pleasent memory.
I recently attended several live trading sessions with the guys at thinkorswim. Theirs is a great trading platform that automatically fills in limits at the midpoint. Doing many trades on indices, (not the SPX though) they were only taking trades that filled at the midpoint. If I remember correctly they were filled on 60% of the orders.Quote from Dr. Zhivodka:
THis mid-point stuff is a strange concept that one should not take too seriously. Or you'll rudely awakened when you find out your wrong on the trade and you're trying get out. Then the "Mid-point" will be nothing but a pleasent memory.
You said it yourself, "not the SPX."
end of story
That's the reason they don't trade the SPX. Or to be more accurate, that's the reason they don't teach their retail customers to trade SPX credit spreads or Irons.
They, in their capital (managed money)account trade the shiate out of them.
end of story
That's the reason they don't trade the SPX. Or to be more accurate, that's the reason they don't teach their retail customers to trade SPX credit spreads or Irons.
They, in their capital (managed money)account trade the shiate out of them.
