SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Donna,
The May calls are making money, unfortunately the May puts are losing money... per say. The shorts will expire worthless, but is volatility which we want.
It's VEGA which we are trading, not Delta.
As it stands now... the trade is profitable and with little risk.
Phil,
We were looking to sell calendars into anytype of volatility movement, but it really didn't happen soon enough, so now.. it's expire and sell a short strangle to form a condor. Possibly leg into each side as Delta allows.
Murray
Sorry for the Delay... been studying futures with a microscope and have a ton of questions the experieced futures traders out there.
Coach and Murray...with this upsurg in spx how is the call diag going? Coach are you going to hold on to May's calls in the diag I know Murray said he would be closing the spread and opening a new one. [/QUOTE]
The May calls are making money, unfortunately the May puts are losing money... per say. The shorts will expire worthless, but is volatility which we want.
It's VEGA which we are trading, not Delta.
As it stands now... the trade is profitable and with little risk.
Phil,
We were looking to sell calendars into anytype of volatility movement, but it really didn't happen soon enough, so now.. it's expire and sell a short strangle to form a condor. Possibly leg into each side as Delta allows.
Murray
Sorry for the Delay... been studying futures with a microscope and have a ton of questions the experieced futures traders out there.
Coach and Murray...with this upsurg in spx how is the call diag going? Coach are you going to hold on to May's calls in the diag I know Murray said he would be closing the spread and opening a new one. [/QUOTE]
Phil,
With less than three days to expiration, tell me why you closed the Diagonal Position.
The 660 net credit was yours for the taking.... no matter how far down the market would move the next two days.
The additional 200+ was ear-marked for a nice follow-through rally from here going forward. As the past has shown, there is a high probability the market will move up tomorrow from here.... as you look back over the past six months of upside correction from lower channel resistance.
It would be appear to me that the small amount of additional credit would be worth the probable movement upward by leaving the diagonal position on until expiration.
If you're only looking.... for next month.... I would feel the justification (reward:risk) favors leaving the position on until expiration.
Even an increase in volatility would save the deteriation of the Long may call... and being expiration week... many rolled positions would help stabalize or increase the volatility of that position during the next two days.
Keep a (paper trade) eye on the call.... let's see what would have resulted.
Murray
With less than three days to expiration, tell me why you closed the Diagonal Position.
The 660 net credit was yours for the taking.... no matter how far down the market would move the next two days.
The additional 200+ was ear-marked for a nice follow-through rally from here going forward. As the past has shown, there is a high probability the market will move up tomorrow from here.... as you look back over the past six months of upside correction from lower channel resistance.
It would be appear to me that the small amount of additional credit would be worth the probable movement upward by leaving the diagonal position on until expiration.
If you're only looking.... for next month.... I would feel the justification (reward:risk) favors leaving the position on until expiration.
Even an increase in volatility would save the deteriation of the Long may call... and being expiration week... many rolled positions would help stabalize or increase the volatility of that position during the next two days.
Keep a (paper trade) eye on the call.... let's see what would have resulted.
Murray
Well I pocketed about $800 on the 10 * 8 call diagonal so I think I will do them in small bunches to bring in credits and potential for more profits. I am going to look into what strikes I might grab on the surge today to take advantage for a MAY/JUNE Diagonal.
Added some call spreads to my put spreads for MAY for an Iron Condor. I think we have some upside but I chose the 1370 strike for my short calls to give me a nice cushion. Sold 500 of teh 1370/1380 Call Spreads for $0.20. Basically I recoup the cost of my SPY Put and VIX Call hedges and put more money in my pocket potentially at expiration.
REVISED POSITIONS:
MAY POSITIONS
-500 SPX MAY 1215/1225/1370/1380 Iron Condors @ $0.60
Credit = $30,000
Risk = $480,000
Return = 6.25%
Long 100 VIX MAY 20.00 Calls @ $0.20
Cost = $2,000
Long 50 VIX MAY 15.0 Calls @ $0.62
Cost = $3,100
APRIL POSITIONS
SPX CALL DIAGONAL SPREAD:
- 8 SPX APR 1340 Calls @ $4.70
+ 10 SPX MAY 1375 Calls @ $3.10
Initial Net Credit = $660
Closed for net credit of $815.25
SPX BULL PUT SPREAD:
- 350 SPX APR 1225/1235 Put Spreads @ $0.35
Net Credit = $12,250
Closed for net credit of $0.15 or $5,250
PUT SPREAD PARTIAL HEDGE:
+ 100 SPY APR 126/125 Put Spreads @ $0.10
Net Debit = $1,000
Assumed closed for $1,000 loss
REVISED POSITIONS:
MAY POSITIONS
-500 SPX MAY 1215/1225/1370/1380 Iron Condors @ $0.60
Credit = $30,000
Risk = $480,000
Return = 6.25%
Long 100 VIX MAY 20.00 Calls @ $0.20
Cost = $2,000
Long 50 VIX MAY 15.0 Calls @ $0.62
Cost = $3,100
APRIL POSITIONS
SPX CALL DIAGONAL SPREAD:
- 8 SPX APR 1340 Calls @ $4.70
+ 10 SPX MAY 1375 Calls @ $3.10
Initial Net Credit = $660
Closed for net credit of $815.25
SPX BULL PUT SPREAD:
- 350 SPX APR 1225/1235 Put Spreads @ $0.35
Net Credit = $12,250
Closed for net credit of $0.15 or $5,250
PUT SPREAD PARTIAL HEDGE:
+ 100 SPY APR 126/125 Put Spreads @ $0.10
Net Debit = $1,000
Assumed closed for $1,000 loss
Yeah, me too. I step away for a couple hours and look what happens. At least we get an idea for what we can expect after the next fed meeting. I'm starting to think I should've waited a couple days to open the calls earlier.
Well the amounts have gotten a bigger so I am trying to shoot for more consistency. The post-Katrina and pre-Thanksgiving swings last year ate into my profits a bit so I want to go as far OTM as I can and not get to greedy 
I tried to close out my April 1235/1245 put spread for .05 today. Got a partial fill and now will have to wait until tomorrow to finish out the rest. I think I have read other people complain that they got hit with 2 commissions when this happened to them (this is an OX account), is that the case?
ryan
ryan