SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
optioncoach, i read a post where you say "My book..." which book are you referring to?
Thanks,
Slave.
Thanks,
Slave.
I PMd you....
Thanks Optioncoach...plan on picking this up next week.
If you think it sucks.... my co-author wrote it LOL 
Well here is the wrap up for me for June. I know there has been a lot of discussion about the adjustments. So let me tell everyone my final tally givne the adjustments I made to my positions.
First, here is the net profit and loss on all my SPX spreads for JUNE including the adjustments I made when the market bottomed (lol):
When adding the net loss of $3,062.50 from the SPY hedges, my NET PROFIT = $500.00.
So with adjustments I was still able to bank some cash this month with the market falling about 100 points. The reasons for this was my set up to the adjustments.
1. I grabbed the put profits when I canin the 1140/1160 and was exepcting to look for JULY positions. When I could not get out of the calls I decided to add more puts to grab more credit. Banking the puts gave me small cushion for the month.
2. Expecting some type of move lower and possible adjustment, I closed out my calls for a profit so that I could not be bound by the IC margin and simply have puts free to roll the short strike lower.
3. My adjsutment was to roll the 1195 to 1190 for some cushion and go from a 20-point spread to a 15- point spread which used less margin. I was then able to sell more 1175/1190 spreads to use the same margin and take in more credit.
4. I did not take any profits in my put hedges because I wanted there to help me if we broke to 1200. It is tempting to swing trade the hedges but they are their for small insurance and only work when they stay in place.
Now I am not saying I had all of this mapped out but when I was taking the calls off I did say in my post I wanted freedom to roll the short put strike down. So I followed the plan and sold more puts. With a few days to expiration, I would have rolled one more time to a 1175/1185 put spread depending on how fast we moved below 1220 and sold even more put spreads to use the same margin. Worst case scenario I would have taken a small loss and got out of the way. I would have allowed myself up to a 5% loss on the margin risked before cutting quickly.
SO I am quite happy with the $500 in net profits. Evne happier I adjusted. I could have waited another day and watched the market rebound and been safe with $13,000 in profits. But only ESP could have told me we would bounce after CPI news. We could have just as easily dropped another 15....
First, here is the net profit and loss on all my SPX spreads for JUNE including the adjustments I made when the market bottomed (lol):
When adding the net loss of $3,062.50 from the SPY hedges, my NET PROFIT = $500.00.
So with adjustments I was still able to bank some cash this month with the market falling about 100 points. The reasons for this was my set up to the adjustments.
1. I grabbed the put profits when I canin the 1140/1160 and was exepcting to look for JULY positions. When I could not get out of the calls I decided to add more puts to grab more credit. Banking the puts gave me small cushion for the month.
2. Expecting some type of move lower and possible adjustment, I closed out my calls for a profit so that I could not be bound by the IC margin and simply have puts free to roll the short strike lower.
3. My adjsutment was to roll the 1195 to 1190 for some cushion and go from a 20-point spread to a 15- point spread which used less margin. I was then able to sell more 1175/1190 spreads to use the same margin and take in more credit.
4. I did not take any profits in my put hedges because I wanted there to help me if we broke to 1200. It is tempting to swing trade the hedges but they are their for small insurance and only work when they stay in place.
Now I am not saying I had all of this mapped out but when I was taking the calls off I did say in my post I wanted freedom to roll the short put strike down. So I followed the plan and sold more puts. With a few days to expiration, I would have rolled one more time to a 1175/1185 put spread depending on how fast we moved below 1220 and sold even more put spreads to use the same margin. Worst case scenario I would have taken a small loss and got out of the way. I would have allowed myself up to a 5% loss on the margin risked before cutting quickly.
SO I am quite happy with the $500 in net profits. Evne happier I adjusted. I could have waited another day and watched the market rebound and been safe with $13,000 in profits. But only ESP could have told me we would bounce after CPI news. We could have just as easily dropped another 15....
I'm interested in studying this strategy further. Not for selling naked puts but naked calls on the ES really FOTM. Unfortunately, I have zero experience with futures and ToS does not have options on futures. I know that IB does. Is there any website out there where I can see free quotes on ES options. IOW, I'm not ready to sign up with IB until I do some homework on this idea first. But I need to be able to see the ES options quotes.
Underneath the chart where all the parameters are there is a button "get options". That will show you the quotes for all forward months that settle to the sep contract.
http://www.futuresource.com/charts/charts.jsp?s=ESU06
you can also get quotes from the CME here:
http://www.cme.com/trading/dta/del/product_list.html?ProductType=idx
I use the first one for historical futs/futs options data whenever i am too lazy to log onto IB. Both sites should have pretty much all the info you need to get started with ES options specifications and free delayed quotes.
Thanks Rally. I'll check out the links.
Since you trade options on futures, what's your take on this strategy? My thinking is that if I can go out 150 to 200 points and get a decent credit (and this may be a really big assumption), then this might be a very high probability strategy. On the call side only, though. The black swan could still take out such a position on the put side.
Since you trade options on futures, what's your take on this strategy? My thinking is that if I can go out 150 to 200 points and get a decent credit (and this may be a really big assumption), then this might be a very high probability strategy. On the call side only, though. The black swan could still take out such a position on the put side.