SPX Credit Spread Trader

Killing some time on a slow morning I wanted to pose a philosophical question..

Jessica Alba and Vanessa Minillo... separated at birth? Look at pics of the two and decide.... :D

Another day of going nowhere. I hope this with 1330 or so call strikes who were nervous got some good theta this past week to help squeeze out some premium. Tomorrow a fed meeting announcement and any sign of good news will easily give us a 10 - 15 handle move in the SPX. So just be prepared.

However the last 2 or 3 announcements have had an initial pop with a market bleed lower the rest of the day... I expect the same to happen.
 
Got filled on the following today:

SPX APR 1240/1225 bull put for $0.50

The premium was less than I would have liked, but adequate for a 60 point distance.

Also, the XSP mid was of no help in setting the initial credit. Not only because there is no 122.5 but also because the mid for the XSP was 0.00 to 0.05 on spreads in that general strike area.

As noted earlier by whomever posted this method, there probably has to be at least a 0.05 to 0.10 mid on the XSP to multiply by 10 to determine an equivalent for the SPX.
 
Quote from rdemyan:

Got filled on the following today:

SPX APR 1240/1225 bull put for $0.50

The premium was less than I would have liked, but adequate for a 60 point distance.

Also, the XSP mid was of no help in setting the initial credit. Not only because there is no 122.5 but also because the mid for the XSP was 0.00 to 0.05 on spreads in that general strike area.

As noted earlier by whomever posted this method, there probably has to be at least a 0.05 to 0.10 mid on the XSP to multiply by 10 to determine an equivalent for the SPX.
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Yep, in my description I think I noted that I tend to be a little more aggressive in my strike selection which allows me to compare the SPX/XSP spreads with some value. It is really entirely useless for ultra conservative 80-point OTM front month spreads. Comments appreciated though. :D
 
Quote from optioncoach:

Killing some time on a slow morning I wanted to pose a philosophical question..

Jessica Alba and Vanessa Minillo... separated at birth? Look at pics of the two and decide.... :D

Another day of going nowhere. I hope this with 1330 or so call strikes who were nervous got some good theta this past week to help squeeze out some premium. Tomorrow a fed meeting announcement and any sign of good news will easily give us a 10 - 15 handle move in the SPX. So just be prepared.

However the last 2 or 3 announcements have had an initial pop with a market bleed lower the rest of the day... I expect the same to happen.
More...

I had to look up the pic for Vanessa, they definately have some rather appealing similarities...

Anybody brave enough to put on a bull put spread semi-close to the market and play the pop tomorrow? I like sleeping at night so I'm going to pass, but it would be an interesting play. I think I will try the TOS papertrading feature on this one just for fun. I'm throwing the dart at the board and it says, short the 1265. Got "filled" at .80 so I will see what happens tomorrow.

ryan
 
I am interested in Sailing's Diagonal Call spreads, but I am not sure how to enter an order. I use OX. Do you have to leg in or can you enter a spread with different number of contracts? I generally use the spread tab, but the prices are geared for the same number of contracts. I guess you could do the diagonal spread for the covered part and then buy the extra longs separate. Perhaps this is not an issue with other brokers. Thanks for any help.

Chip
 
Quote from Chipper7:

I am interested in Sailing's Diagonal Call spreads, but I am not sure how to enter an order. I use OX. Do you have to leg in or can you enter a spread with different number of contracts? I generally use the spread tab, but the prices are geared for the same number of contracts. I guess you could do the diagonal spread for the covered part and then buy the extra longs separate. Perhaps this is not an issue with other brokers. Thanks for any help.

Chip
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If you are using the spread tab you can enter different quantities of contracts for each of the contracts you are buying/selling. I'm not sure I am following your question.

ryan
 
Quote from ryank:

If you are using the spread tab you can enter different quantities of contracts for each of the contracts you are buying/selling. I'm not sure I am following your question.

ryan
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I did try to enter it that way and the system took it. I was curious about how to enter the price. Say the long is at 1.7 and I want 10 of those and the short is at 2.5 and I want 7 of those.

Do I enter a credit of 0.8? I can see this for the 7 covered spreads, but then there would be a debit of 1.7 for the remaining 3 longs. Does the OX system just price this way automatically? I could call them and ask, but I was hoping for an easy answer here. Thanks.

Chip
 
Quote from Chipper7:

I did try to enter it that way and the system took it. I was curious about how to enter the price. Say the long is at 1.7 and I want 10 of those and the short is at 2.5 and I want 7 of those.

Do I enter a credit of 0.8? I can see this for the 7 covered spreads, but then there would be a debit of 1.7 for the remaining 3 longs. Does the OX system just price this way automatically? I could call them and ask, but I was hoping for an easy answer here. Thanks.

Chip
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I think it would be:

10x1.7= 17x100= $1700 debit
7x2.5= 17.5x100= $1750 credit
net credit of .50

Enter the number of contracts you are looking for at a credit of .50.

ryan
 
My experience with OX is that if you enter the spread components and do a 7*10 for example, the bid/ask shown will reflect the number of contracts you ar elooking for and derive the b/a using the 7 long and 10 shorts and the b/a of each leg for a composite b/a. In otder words, determine the b/a of a 10*7 ratio diagonal first and then enter the contracts into the spread entry form with the 10 and 7 contract entry and see the b/a that is shown. I think it automatically makes the calculation.

From there you can then enter a limit in between the spread.
 
Hey coach, have you backtested the market's reactions to your posts? With 50,000 members, I was wondering if there's a tick with your name on it :p
Thanks and keep up the great work
(and p.s. please don't curse! :D )
 
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