SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
I do not look at these as stand alone trades, since these were all part of my JUNE positions. I did not mind making the adjustment now since I already banked profits on the calls and the puts after effectively rolling higher. The banked profits is what guides in me in what adjustments to make. Do not forget that the $0.75 debit was reduced with the additional put spreads....
OC , the other June positions has nothing to do with the fact that this adjustment was a 5.5:1 bet for SPX to move 35 points in next 2 days. If SPX will be above 1195 you will LOSE 17k on this bet ( your PnL will be at -5 instead of +12 , which is the same thing).
You can ask any of big shots on ET if I,m right or wrong.
Good luck
It is not a question of right or wrong nor can you isolate any specific position without taking into account my overall risk and portfolio management which affects my decision making.
The point was to push back my strikes because of the potential for us to fall further and for SET to become a problem on a 3x witching. The SPX does not have to fall to 1195. It could go to 1205 and a 12 point SET hurts.
I do not see the point in extrapolating out some bet odds. This move is based on current market conditions and 2 days to expiration and 3x witching SET on Friday morning. Your assumption is that I would do the same each and every case and therefore make an assumption about how my PnL would be if I did this 10 times. Many factors go into each adjustment, including banked profits which affect my monthly loss on the positions. You cannot ignore those since I do not in making the decision.
It is like the expectancy of credit spreads assuming one would always go to maximum loss each position.
Also the adjustment cost less than $17k due to the put sale. The $5k loss estimates addes my partial hedges.
My bigger point is that many people make broad brush stroke analysis of a single move without putting it in any context. I doubt any trader would take a single move in a vaccuum and not take into account market conditions, time to expiration and legged in profits to determine whether to adjust or not. Remember my 1255 put spreads for MAY I left until expiration and DID not adjust based on market conditions and support levels.
You may see it as turning a 12K into a 5k loss and a "bet" I would take 10 times and be net negative. I see it as following my risk management plan under these specific facts so that I have more room to absorb today's potential downward move AND a SET. If the market moves lower to 1205 I would roll again. I would take a $5k loss here on a $450K risk position in this situation quite easily
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The point was to push back my strikes because of the potential for us to fall further and for SET to become a problem on a 3x witching. The SPX does not have to fall to 1195. It could go to 1205 and a 12 point SET hurts.
I do not see the point in extrapolating out some bet odds. This move is based on current market conditions and 2 days to expiration and 3x witching SET on Friday morning. Your assumption is that I would do the same each and every case and therefore make an assumption about how my PnL would be if I did this 10 times. Many factors go into each adjustment, including banked profits which affect my monthly loss on the positions. You cannot ignore those since I do not in making the decision.
It is like the expectancy of credit spreads assuming one would always go to maximum loss each position.
Also the adjustment cost less than $17k due to the put sale. The $5k loss estimates addes my partial hedges.
My bigger point is that many people make broad brush stroke analysis of a single move without putting it in any context. I doubt any trader would take a single move in a vaccuum and not take into account market conditions, time to expiration and legged in profits to determine whether to adjust or not. Remember my 1255 put spreads for MAY I left until expiration and DID not adjust based on market conditions and support levels.
You may see it as turning a 12K into a 5k loss and a "bet" I would take 10 times and be net negative. I see it as following my risk management plan under these specific facts so that I have more room to absorb today's potential downward move AND a SET. If the market moves lower to 1205 I would roll again. I would take a $5k loss here on a $450K risk position in this situation quite easily
.Quote from optioncoach:
I think was my point.... I do not think anyone here has expressed any concern over credit spreads in higher vol environment. I actuallly welcome it because due to the put spread skew I can go further OTM then I would conservatively go. What concerns me more is actual volatility of the markets to the downside and this 100 drop was pretty orderly over the short-time period and followed a technical analysis pattern
Agreed.
Anyway, core CPI higher than expected but futures are up right now. Anyone else confused by this? Could it be that we are really that oversold?
I agree that other markets are more difficult to get fills like FCOJ, coffee, etc. My point was that spx trades roughly $5 billion daily, hence when push comes to shove, a market order can get u out relatively easy whether you're Bill Gates or Tom, Dick and Harry.
Yep, love them too. Margin benefits are incredible, low liquidity though so you must be good at legging in if you want nice fills on multi leg positions. Friend of mine trades through ox and told me they were working on adding them to their platform, i am somehow dubious that would happen anytime soon though. So IB might be the only retail provider for a while.
EDIT: I think tradestation has them too if i am not mistaken.
I hope she does not let herself go bones on me. She is hot but she needs to keep the meat on the bone.
Quote from rallymode:
Yea i use imageshack, pretty much the same thing.
Is it me or does JA seemed somewhat skinnier than before? What's up with all these celebrities chasing the skin and bones look. What's a woman without some nice curves?