SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Yeah. I am in a similar situation. I have a Mar 1320/1335 bear call. At this point if I close it I will just be buying back the 1320. Right now the bid/ask is $0.45/0.50 for the 1320. I've had an order in since the open to get out at $0.10, but I'll be upping that soon.
In the past, I have noticed a pretty large drop in individual OTM option prices during the last hour of the last day to trade. But this situation is kind of crazy with the SPX blasting higher, quadruple witching, etc.
In the past, I have noticed a pretty large drop in individual OTM option prices during the last hour of the last day to trade. But this situation is kind of crazy with the SPX blasting higher, quadruple witching, etc.
If you haven't done so yet, take a quick look at the video tutorials (especially the analyze tutorial). There are a couple features that I didn't know about until I watched those. Pretty cool what you can do with TOS.
You broke even on the trade for a nickle? You sold the spread for a nickle? I must be missing something lol.
Let's see:
I had a 1320/1335 and I bought back the 1320 for $0.20 and sold
the 1335 for $0.05 (legged trades).
I also had a remaining 1330/1345 and bought back the 1330 short for $0.05 just to eliminate any chance that the SET could affect me.
So I was referring to the 1335 and 1330 even though they weren't matched up. I considered myself lucky to unload the 1335 long for a nickel, so I thought I would take advantage of that "windfall" and eliminate any possible SET risk on the 1330 by buying it back for a nickel.
I had a 1320/1335 and I bought back the 1320 for $0.20 and sold
the 1335 for $0.05 (legged trades).
I also had a remaining 1330/1345 and bought back the 1330 short for $0.05 just to eliminate any chance that the SET could affect me.
So I was referring to the 1335 and 1330 even though they weren't matched up. I considered myself lucky to unload the 1335 long for a nickel, so I thought I would take advantage of that "windfall" and eliminate any possible SET risk on the 1330 by buying it back for a nickel.
Ahhh when you say breakeven it implies you made or lost no money on the trade. I assume you still made money on those spreads (i.e. sold them for a lot more than the $0.15 to close).
Always a good idea to take the profit and avoid SET issues. Remember I always said that SET is not a big deal at all, just close out the position by Thursday and you never have to even worry about SET
Always a good idea to take the profit and avoid SET issues. Remember I always said that SET is not a big deal at all, just close out the position by Thursday and you never have to even worry about SET
Do guys factor in commish on these trades? I have 100 1325/1335 and if I closed out for even .05, it would still cost me $500 plus the $250 in commish, $750 total. Not chump change for a very small prob of expiring in the $$.
Yes, I know there is the risk of SET, but that would have to be a pretty wicked set to gap up 13+ points from where it is right now, 3:40pm.
sd
Yes, I know there is the risk of SET, but that would have to be a pretty wicked set to gap up 13+ points from where it is right now, 3:40pm.
sd
Its more than $250 in commish isn't it? you have 100 1325's and 100 1335's so that would be $500 at 1.25 per contract unless your closing out just the 1325's. BTW I agree with you it is definitely one of my considerations...I try not to be foolish with it but given the feel of the market and some of the big players ie large cap's...If say GE were reporting tomorrow or tonight and you thought they might gap up the next am then you might weigh it more carefully.