SPX Credit Spread Trader

DIAGONAL POSITION UPDATE


Sold 135 AUG EW 1315 Calls @ Average Price of 1.83
Credit = ~ $12,402.50

Bought 150 SEP ES 1335 Calls @ 1.45
Debit = $10,875

INITIAL NET CREDIT = $1,527.50

Eventually added extra 15 AUG EW Calls @ 4.00 for additional credit of $3,000.

NEW NET CREDIT = $4,527.50


-----> 1315 EW Calls on pace to expire worthless on Thursday hopefully. 1335 SEP ES calls trading at 1.30.

I would love for the market to bleeds 5 points higher over the next 2 days and then a nice up day Friday so I can close the ES Calls for a huge premium boost. We shall see...
 
Thanks coach...but I was thinking of Sailing and the others who entered into Sept/Oct Put Diagonals after the SPX jumped to 1290 or so a couple weeks back.


I've been terrible recently at determining market direction...I only make money because of way OTM spreads...but I want to learn about diagonals...specifically, what to do when it goes against you and how far it had to go against those guys before any adjustments had to be made.
 
Quote from kalikahuna:

I have a question for all the Sept/Oct put diagonal guys....when do you guys make adjustments if any or how much further up does it have to go before any adjustments are made and what would those adjustments be?

Are you guys still on pace for profit or not?
More...

STO Sep 1250p
BTO Oct 1225p
debit = 3.00
current mid = 3.05

STO Sep 1275p
BTO Oct 1250p
debit = 1.70
current mid = 1.90

STO Sep 1325c
BTO Oct 1350c
debit = 2.90
current mid = 3.65

I'm somewhat profitable at the moment with no adjustments on the horizon just yet. Lots of data yet this week, a holiday shortened week next week and still a decent amount of time to expiration. I'm looking for ways to "prop up" my diagonals profit as the market moves higher but haven't found anything good yet. Just sitting on my hands for now.
 
Quote from kalikahuna:

I have a question for all the Sept/Oct put diagonal guys....when do you guys make adjustments if any or how much further up does it have to go before any adjustments are made and what would those adjustments be?

Are you guys still on pace for profit or not?
More...

I make an adjustment when the short strike is breached. I may stall a bit to see if market turns around, but I don't wait long.

My preferred adjustment is to roll down and out by doing a diagonal butterfly. For example, if I were short Sep 1000 and long Oct 1025 calls, I would cover that position and open this new position: short Oct 1025 and long Nov 1050. I would also sell somewhere between 50 and 100% extra spreads. That means for every 2-lot that I cover, I would sell between 3 and 4 lots of the new spread.

Yes, my Sep/Oct diagonal positions are still on target for a profit.

Mark
 
Quote from optioncoach:

DIAGONAL POSITION UPDATE


Sold 135 AUG EW 1315 Calls @ Average Price of 1.83
Credit = ~ $12,402.50

Bought 150 SEP ES 1335 Calls @ 1.45
Debit = $10,875

INITIAL NET CREDIT = $1,527.50

Eventually added extra 15 AUG EW Calls @ 4.00 for additional credit of $3,000.

NEW NET CREDIT = $4,527.50


-----> 1315 EW Calls on pace to expire worthless on Thursday hopefully. 1335 SEP ES calls trading at 1.30.

I would love for the market to bleeds 5 points higher over the next 2 days and then a nice up day Friday so I can close the ES Calls for a huge premium boost. We shall see...
More...

sooooo say the market dosen't cooperate tomorrow or Thurs and heads down...would you or will you close out for a profit? Or would you, will you hang on anyway?
 
Hi everyone. I'm happy to have found this thread and have been lurking and catching up for a few weeks now. I hope you don’t mind if I join the conversation at this point.

I mainly trade vertical spreads on the indices and a few calendars on equities. My current position is 10 x 1250/1260/1340/1350 SEP iron condor, 2 x 1265/1255 SEP put diagonal and 2 x 1240/1250 SEP put diagonal. All on ES.

I’m currently in watching paint dry mode and hoping for some increase in volatility next week to improve the yield, but will do okay between 1260 and 1340.

Coach's posts gave me the idea of rolling the short ES SEP puts from the diagonals to EW, but I'll wait until the end of next week to see where we are at.

*Luis
 
f the market heads lower then I do nothing. I am not going to sell my ES calls and leave myself naked 150 EW calls. I have a large credit so if the market crashes today and tomorrow, I still have a profit, just like with regular credit spreads.

But right now the plan is hold to expiration day (Thursday) and let theta eat the rest of the 1315 Calls. I think we are going to hover in this range which makes my 1335 calls fat and delicious :)

Quote from RichardRimes:

sooooo say the market dosen't cooperate tomorrow or Thurs and heads down...would you or will you close out for a profit? Or would you, will you hang on anyway?
More...
 
Well it's probably not a issue, so the main sources I use are:
RedOption commentary
TimeFrameInvestor.com
TheKirkReport
and the EliteTrader board.

Anyone else like to share?

burr...

Quote from burrben:

I'm not sure if this violates the policy of ET or not, but it would be interesting to have a list of the services we use to assist us in trading SPX spreads. For example, market timing journals, tech analysis, commentary, etc. Paid or not paid.

Any interest?
More...
 
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