SPX Credit Spread Trader

[blure2]

What is your exit rule?

My strategy is to close my position if the current moves to within 15 points of my short strike.

Should have stuck to my guns but was listening too much to the notion that a major sell off was, possibly, coming.

I suffered from premature liquidation...:eek:

 

[clslaw]

Quote from optioncoach:

Day 1..... I'm @#$%ing exhausted....

Take it from another dad, you won't miss the sleep. Well, you will but it you don't really. Enjoy the experience!

Congratulations!

 

[piccon]

You need to go with your guts not the noise out there.

I don't close position at 15 or 20 points from short; instead I try to buy a lot of IWM Call or PUT to counter the effect of the short close to being touched. I also make sure my condor was created and at the same time close any profitable call spread and open closer to the money call spread to pickup enough premium in case I have to close the Put side.

You need to be active and always ready to take action.

Quote from blure2:

My strategy is to close my position if the current moves to within 15 points of my short strike.

Should have stuck to my guns but was listening too much to the notion that a major sell off was, possibly, coming.

I suffered from premature liquidation...:eek:

 

[Heatheranderson]

I don't close position at 15 or 20 points from short; instead I try to buy a lot of IWM Call or PUT to counter the effect of the short close to being touched. I also make sure my condor was created and at the same time close any profitable call spread and open closer to the money call spread to pickup enough premium in case I have to close the Put side.
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In response to the above post i would like to share my June SPX trade.

20 June SPX 1205/1215 Bull Put spread--credit $1----Opened
20 June SPX 1350/1360 Bear Call Spread--Credit $0.7----Opened

10 SPY 124/122 debit spread----Debit $0.2----Opened
30 SPY 124/123 debit spread----Credit $0.2----Opened

20 June SPX 1205/1215 Bull Put spread--Debit $1.6----Closed

10 SPY 124/122 debit spread----Credit $0.7----Closed
30 SPY 124/123 debit spread----Credit $0.4----Closed

20 June SPX 1350/1360 Bear Call Spread--Debit $0.1----Closed

 

[Cache Landing]

Quote from rallymode:

when in doubt, stay out. 100% cash here

Ditto!

 

[nlslax]

Quote from blure2:

Piccon;

I'm a Russell 2K condor guy.

Hello Blure,

My hat's off to you. I don't so many credit spreads (mostly long calendars) but the RUT spreads I've done have been a challenge. This index does not correlate with the SPX (maybe that's a good thing), and I've had a hard time gaming it.

Interested in your future posts.

 

[blure2]

You need to go with your guts not the noise out there.

I don't close position at 15 or 20 points from short; instead I try to buy a lot of IWM Call or PUT to counter the effect of the short close to being touched. I also make sure my condor was created and at the same time close any profitable call spread and open closer to the money call spread to pickup enough premium in case I have to close the Put side.

You need to be active and always ready to take action.

I couldn't agree more. Oh well, at least the goose egg wasn't a big loss. I'm still learning. In fact I have been trying to absorb the hedge of employing IWM. Can I assume that it is similar to what Phil does with SPYs to hedge his SPX spreads?

Thanks,

Bob

 

[blure2]

Quote from nlslax:

Hello Blure,

My hat's off to you. I don't so many credit spreads (mostly long calendars) but the RUT spreads I've done have been a challenge. This index does not correlate with the SPX (maybe that's a good thing), and I've had a hard time gaming it.

Interested in your future posts.[/qoute]

I have a tough time getting my orders filled with the SPX. I just can't find the right spot in the wide b/a range. But I have gotten orders filled fairly easily with the RUT. Between virtual trading going back to last summer and my live trades this year, I have been happy with the results.

The last two months have been squirrely, but I have managed to make a little last month and broke even for June. And a big thank you goes to Phil and others here.

Bob

 

[ryank]

Quote from Cache Landing:

Ditto!

I'm all cash also. I was on vacation last week and with the Fed making their annoucment this week I haven't had found a good time (or strike) to put on a position.

 

[Eric99]

Would anyone care to comment on post-hedge plans of action?

I'm talking about using straight longs to hedge credit spreads. If you put side is threatened, buy some long puts between the market and your short puts. And possibly adding to positions on the profitable side of the spread (adding or rolling call spreads) to generate additional credits. If the market continues down, you would roll the spread downward, probably keeping your hedge in place. If the market reverses upwards, you now have a (possibly) unecessary hedge with negative delta and theta characteristics that just ate your initial credit. Do you 'un-hedge' once you think the market is stable? Any ideas out there on this excellent forum?

PS., Quick thanks to the many posters on this thread. I've learned a lot and hope to contribute back.