SPX Credit Spread Trader

[dagnyt]

Quote from arizonadreamer:

Hello everyone. I am interested in learning more about this SPX diagonal that some of you have been doing.

1) When is the best time to establish such a spread? i.e. closer to expiration or the full 4 or 5 weeks from expiration. (I've actually done this with success during expiration week in the past.)

2) Are any of you worrying about this "black swan" type of event where no adjustment would be possible?

3) How far out of the money are you going with these?

4) What is the % profit you are shooting for?

5) I know volatility plays a role, but so do current events. With all that is happening worldwide, do you believe that now is a particularly dangerous time to play this spread?

Thanks in advance for any answers.

AZD

Hi AZ,

Every invetor has his own answers, but

1) I prefer 6-7 weeks out, but also do them for less time, if other criteria are satisfied

2) I worry, but do nothing

3) I go as far OTM as possible, as long a I can rceived my minimum credit (see below)

4) I'm consevative. I settle for 3%, and occasionally even 2%. That means if the difference between the strike prices is 30 (and thus, the margin is $3,000), I want a credit of 90 cents. My goal is to close the position when I can collect another cash credit for closing. [Some here hold positions longer, looking for super returns.] I would rather go further OTM and collect 90 cents than go closer to the money and collect a higher premium. When choosing strikes, it's prudent, if possible, to sell a call strike that is above resistence and a put strike that is below support.

5) No. Increasing IV is profitable.

Mark

 

[yip1997]

Quote from Sailing:

Theoretical Options prices Website Needed?

While facilitating this Mondays investment club meeting, I'm in need of a site which will pull option string quotes as well as theoretical values. (The University's firewall, where we meet, doesn't allow my regular account access for quotes)

Does anyone know of a website which provides theoretical values?

Thanks,

M~

www.888options.com

 

[Sailing]

Thanks... that will work just fine.

Quote from yip1997:

www.888options.com

 

[Sailing]

Someone asked about Historical Options Prices....

The only FREE site I know of is:

http://host.businessweek.com/businessweek/Historical_Quotes.html?Button=NEW+REQUEST&Symbol=WIB+AR

Murray

 

[Sailing]

Website Tidbit

For those of you looking at Ivolatility.com for implied volatility charts.... you can click on the web-address in your address bar and change 'period=12' to whatever number of months you'd like to see up to 60 (5 years). This is a nice little feature we stumbled upon some time ago.

Check it out:

http://www.ivolatility.com/options.j?ticker=SPX:&R=1&period=60&chart=2&vct=

 

[yip1997]

I plan to open spx 1160/1150 credit spread on Monday. The margin should be 1000 for each contract.

Anyone knows the span margin for the corresponding es credit spread? I don't have any future account, and will like to get an idea of the leverage that I can get if i switch to future options.

 

[volatilitypimp]

Quote from Sailing:

Website Tidbit

For those of you looking at Ivolatility.com for implied volatility charts.... you can click on the web-address in your address bar and change 'period=12' to whatever number of months you'd like to see up to 60 (5 years). This is a nice little feature we stumbled upon some time ago.

Check it out:

http://www.ivolatility.com/options.j?ticker=SPX:&R=1&period=60&chart=2&vct=

OMFG, sailing if you were a woman I would kiss you right now. That is the best tidbit I've received in the past 10 months. 2yr, 4yr volty charts are crucial to find decile levels. You just saved me a few grand, cause I was gonna buy optionvue software for that reason. Obvs, they have mad scanners and such, but still. Sailing, I love you, man.

[EDIT: I seriously love sailing. I know I'm usually a sarcasic Sid on this site, but this is really the coolest sh** I've heard in a while.]

 

[arizonadreamer]

Sailing,

Thanks for the reply.

Do you have a specific example of something that looks good to you for the current period. I'm not asking for advice, but just trying to get an idea of your methodology. I came in late to the discussion.

AZD

 

[arizonadreamer]

Mark,

It's good to see you in this parallel cyberuniverse.

In your reply, are you talking about a vertical spread or the diagonal credit/debit spread that many seem to be doing?

AZD

 

[dagnyt]

Quote from arizonadreamer:

Mark,

It's good to see you in this parallel cyberuniverse.

In your reply, are you talking about a vertical spread or the diagonal credit/debit spread that many seem to be doing?

AZD

Hi Arizona,

Yes, it's nice to play with the grownups.

I'm referring to diagonal credit spreads.

Mark