SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
If you have a broker that understands options, then they will treat the margin correctly as having the APRIL positions covered by the MAY positions. I believe ToS or OX will treat this as a diagonal with Iron Condor like margin requirements. I did diagonals using SPX and weeklies and ToS automatically treated it as a hedged spread.
TRADE UPDATE- closed my Iron Condor to free up margin for April positions. CUMQUAT
REMINDER
My Current Positions:
- 150 SPX 1185/1195 BOX Spreads
Net Loss = $9,000 or $0.60
- 175 MAR SPX Iron Condors 1165/1180/1335/1350 @ $1.15
Credit = $20,125
Risk = $242,375
Return = 8.3%
Partial Hedge: 100 MAR XSP $133 Calls @ $0.15 or $1,500.
TODAY:
Closed out the 175 MAR SPX IRON CONDORS (1165/1180/1335/1350) which was sold for net credit of $1.15 for net debit of $0.15 for net profit of $1.00.
Margin: $242,375 (Max risk - premium received)
Net Credit (after commissions): $15,750
Return on Closed IC: 6.5%
POSITION STATUS FOR MAR:
Box Spread: ($9,000)
Closed IC: $15,750
Partial Hedge: ($1,500)
NET: $5,250
NET RETURN on MARGIN: 2.16%
1Q results to be posted at end of MAR.
REMINDER
My Current Positions:
- 150 SPX 1185/1195 BOX Spreads
Net Loss = $9,000 or $0.60
- 175 MAR SPX Iron Condors 1165/1180/1335/1350 @ $1.15
Credit = $20,125
Risk = $242,375
Return = 8.3%
Partial Hedge: 100 MAR XSP $133 Calls @ $0.15 or $1,500.
TODAY:
Closed out the 175 MAR SPX IRON CONDORS (1165/1180/1335/1350) which was sold for net credit of $1.15 for net debit of $0.15 for net profit of $1.00.
Margin: $242,375 (Max risk - premium received)
Net Credit (after commissions): $15,750
Return on Closed IC: 6.5%
POSITION STATUS FOR MAR:
Box Spread: ($9,000)
Closed IC: $15,750
Partial Hedge: ($1,500)
NET: $5,250
NET RETURN on MARGIN: 2.16%
1Q results to be posted at end of MAR.
how do you do colors?
Donna:
You do the following around something you want in color:
(color=green) words here (/color)
EXCEPT replace the ( ) for [ ], use the brackets. After the = you can put any major color.
You do the following around something you want in color:
(color=green) words here (/color)
EXCEPT replace the ( ) for [ ], use the brackets. After the = you can put any major color.
1. SPY does not have the OTM premiums I am looking for due to it being 1/10th the value of the SPX. Also, do replicate my returns I would have to do way more spreads and increase my commission costs. SPX allows me to go 60 points or more OTM, cannot do that with SPY and get same credits. I will be looking at ES options when I move my account next month but have not access to options on futures yet.
2. Getting fills is certainly a practice in patience, depending on how much you want to shave off the bid or ask. I usually let orders sit for a while since the timing of my entry in a day is not as important. I have to shave sometimes bigger than others but in general I get in and out when I need to. Getting out today took 1 minute though so it all depends.
3. April time frame is more my general rule that I do not like to get in positions with more than 45 days to expiration. However once we get under 30, time decay is heavier and premiums are harder to find at the OTM strikes I prefer. So my opimal time fram is 45 to 30 days to expiration to get into my positions. APR just cross the 45 day mark a day or two ago so if I have pretty much all my profits in the MAR positions I close them to free the margin. Since I could close the $1.15 IC for $0.15 I went ahead. If it would have cost me $0.50 to close it, I would have just let it keep running for theta to do its thing. If I have to wait longer to get into April, that is fine. I still have another week or so to grab APRIL positions so I am not in a rush.
2. Getting fills is certainly a practice in patience, depending on how much you want to shave off the bid or ask. I usually let orders sit for a while since the timing of my entry in a day is not as important. I have to shave sometimes bigger than others but in general I get in and out when I need to. Getting out today took 1 minute though so it all depends.
3. April time frame is more my general rule that I do not like to get in positions with more than 45 days to expiration. However once we get under 30, time decay is heavier and premiums are harder to find at the OTM strikes I prefer. So my opimal time fram is 45 to 30 days to expiration to get into my positions. APR just cross the 45 day mark a day or two ago so if I have pretty much all my profits in the MAR positions I close them to free the margin. Since I could close the $1.15 IC for $0.15 I went ahead. If it would have cost me $0.50 to close it, I would have just let it keep running for theta to do its thing. If I have to wait longer to get into April, that is fine. I still have another week or so to grab APRIL positions so I am not in a rush.
Thank you for all answers.
Regarding ES - as I traded SPX before and I trade ES now I would recommend this change to you.
Firstly - liquidity is much better, but this is not all, as you may find margins much more attractive, although overnights are somewhat higher than daily numbers.
However, I want to share my latest experience with spreads. I use IB which is important using ES contracts (commission) but I just have learned today that spreads on futures options are not supported by TWS, i.e. you have to enter them leg by leg.