SPX Credit Spread Trader

I just read in Fortune magazine that Bill Miller of Pimco works out from 11:30-1:00 (Eastern) everyday away from the office and the market. Says he has been doing this for 30 years and has been called back to the office only a few times (crash of '87 was his example). Even the pros take some time off during the day to relax and think about things.

ryan
 
Yess Okayama! I had fun there :) But certainly the lone gaijin there.


Quote from DonnaV:

small world.. I know Okayama...I was a blue eyed/strawberry blond little girl ...mom sis and I the only Gaijin in Kashiwara (near Nara)...went to Japanese 1st grade. Left Japan at 16 and didn't return for 30 yrs...I was actually suprised at how well I remembered the language...lost a lot of course but when you learn as a child you really don't forget it.
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I never read CWS but I do believe there is some new material. See if Amazon has the table of contents so you can browse and see what is different.

Yes it is like talking with riskarb except in person you get more lol. Cottle is quite animated and fun to talk to since he has so much floor experience.


Quote from Opra:

Does he speak like riskarb--when he writes about option positions, I wish I had really learned Greek.

About Cottle's new book, "The Hidden Reality," what percent of it is new material compared to "CWS", Coach?

I guess it is worth having, especailly since all graphs are in color.

http://www.amazon.com/gp/product/09...102-3617021-0414541?s=books&v=glance&n=283155
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you have to find a firm who uses a trust company. one trust company is called millenium.

Quote from DonnaV:

Hi prevail...tos does not allow futures trading in an IRA.... who does?tia
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I have learned so much from this thread and Coach's book. I setup my "
"training" trading account at OX ($15K) and entered credit spreads and many IC's during Feb and Mar and every one expired worthless. I did not have to close or adust any position but I was ready to do so if the SPX was within 10 points of the shorts. Because this is a new strategy for me I have been trading 1 and 2 contracts only and not risking much margin ($12K at the most). I want to continue trading 1-2 contracts for 4-6 months before I transfer a portion ($150K) of my savings. Because I am using OX my profits are very small after commissions. OX is charging 14.95 per leg. I am going to have to move to the lower cost broker next week to reduce these charges.

I have recapped the charges below for TOS, IB and TK assuming 1 credit spread and 1 contract. Are my assumptrions correct? If so I should be using IB while I am trading only 1 and 2 contracts per position. Once I am trading 10-30 contacts I would move to TOS which seems to be everyone's choice because they can initiate your trades by phone.

OX: 14.95 + 14.95 = $29.90
TOS: 9.95 + $1.50 + 1.50 = $12.95
TK: 4.95 + 4.95 + .65 + .65 = $11.20
IB: 1.00 + 1.00 = $2.00
 
DO NOT use IB for credit spreads(IC's) they will charge you margin for both sides of the IC. Thus, an 8% return for the month will be halved to 4%.(yeah, you get better commisions but terrible margins, and don't me started on their custome service)

I think OX, and I know TOS only charges one side of the IC, which is risk based because you can actually only lose on one end. Not too sure about TK.
 
Quote from FitForLife:

....
OX: 14.95 + 14.95 = $29.90
TOS: 9.95 + $1.50 + 1.50 = $12.95
TK: 4.95 + 4.95 + .65 + .65 = $11.20
IB: 1.00 + 1.00 = $2.00
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Assuming that you are talking about one side of an IC spread, i.e., a vertical, the commission at TOS can be:

TOS: 2.95 + 2.95 = $5.90

Until you trade larger lots, you can opt for $1.5/contract plus ticket charge scheme at TOS.
 
Thanks for the heads up on the TOS charges for 1 contract. $5.90 is very reasonable for a 4 legged IC trade and one contract. An its is only $2.95 for a credit spread and one contract.

$5.90 is only 10% of the cost ($59.80) I have been paying OX for the IC trades I did in Feb and March. Moving to TOS will allow me to make a few $ trading 1 and 2 contracts while I learn and practice this trading strategy.

I also assume that TOS will only chage me margin on one side of the IC trade position assuming the same expiration month and same difference in the short and long strikes.
 
First let me say congrats on your conservative approach with a focus on learning first 1 and 2 contracts at a time and then making money when you feel more comfortable.

Second if you do switch to ToS, call up and mention my name as I have gotten friendly with many of the people there (tell them Coach Phil recommended you) and ask if you can get $1.25 a contract once you move to volume (i.e. more han 1 or 2 contracts).

I agree with what has been said before. In doing ICs you want better customer service and margin treatment so go with ToS or OX over IB.

Quote from FitForLife:

Thanks for the heads up on the TOS charges for 1 contract. $5.90 is very reasonable for a 4 legged IC trade and one contract. An its is only $2.95 for a credit spread and one contract.

$5.90 is only 10% of the cost ($59.80) I have been paying OX for the IC trades I did in Feb and March. Moving to TOS will allow me to make a few $ trading 1 and 2 contracts while I learn and practice this trading strategy.

I also assume that TOS will only chage me margin on one side of the IC trade position assuming the same expiration month and same difference in the short and long strikes.
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I agree, I'm in addition to trading IC on teh SPX, I'm moving toward daytradin gteh e-mini s&P. Doen't make sense to elect M2M with the 60/40 treatment

thanks

Quote from Cache Landing:

I actually created a different C-corp. If you change an LLC/S-corp to a C-corp you have to use the calendar year as your fiscal year. I prefer to have my fiscal year different than the calendar year.

Just remember that if you trade a lot of 1256 contracts it might not be a good idea to elect M2M.
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