SPX Credit Spread Trader

Quote from rdemyan:

You know I'm only kidding and will never reveal any of that post.
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I'll reveal the post as it was one of the most absurd posts I have ever read in the 4 years I have been on ET. I mean seriously, I'm not trying to be a dick here. I'm sure everyone will come out and say here comes mav again picking a fight, but seriously, this post by hers was so off the charts, I really think it shot her credibility.

Here is what she said:

"I have made money every month since I started trading except my first month where I lost $50. Last month I made 20K."

I'm sorry, I have to call this shit out otherwise I can't live with myself. I mean who says shit like this? Maybe she was trying be funny and pass this off as a joke. But I'm thinking since she quickly deleted it, that is not the case. Either way, there it is. Donna, the ex-hippie from the 60's that makes money every single month trading. With that track record she must be managing 1 billion dollars by now. Hell Steve Cohen and James Simmons can't even make this boast. Unreal man, absolutely unreal.
 
Quote from IV_Trader:

So now... its very difficult for me to belive that MM can perfectly place a fair value for 2500 stocks times tens of strakes times different months ...and keep this perfection for EVERY minute with ANY change in stock price.
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He is not perfectly placing fair value. His vols are pretty much dead on. It's not hard to do. Vols have been pretty tight the last year and moves have been very predictable. In fact, there was a very comprehensive study done I believe at the University of Chicago showing what the ending vols turned out to be and what they were priced 30 days before. And I believe over 500 stocks, probably the sp 500, the vols were literally within 100 basis points of the actual. That is mind blowing when you think about it. Then when you factor in the spread the mm's make being about 100 to 300 basis points wide. That pretty much covers the margin for error. If I find that study I will post it. I believe one of the trader mags published it as well as the CBOE.
 
A week and a half ago when the RUT was around 766 (but it has been continuously breaking all time highs) and knocking on the door of my 780/790. I doubled up on 790/800 to get ready. Then it retreated south and I was left with -1x 780, -1x 790, +2x 800.

I didn't like the way the technicals look going into what seems like an overall uptrend. I am usually a little bit more cautious around earnings season so I closed them out on the retreat for some nice tidy profit for APR. I usually close out earlier in earning seasons if it looks like it will threaten my shorts. Plus, I needd to free up margins for some earning plays :D

Quote from skeweddude:

Dave,
I know where you are coming from...I had what I thought was a very wide 100 point condor, 790/800/690/680 and both of my shorts were well OTM yesterday. Ofcourse, this morning I was only 20 points OTM and as I write the market is in the green again and the RUT is up only about 13 from my (previous) short.

Whenever the index gets near 20 points of my short strike I start looking for hedges around the 'within 10 point territory'. That's what you were really asking I believe, is it ok to wait and hedge when you are 10 points away, or should you be hedging prior to that? Obviously, in your case, having a strike that's still > 20 points out is not that bad with one trading day left, but I feel like the RUT just explodes or implodes all the time, > 10 point days. I also would like to know at what point others like Piccon and Hybone (RUT fan) put on their hedges. Just interested/curious.

At any event, I put in an order to close my spread this morning but the bids never appeared on my long 800. I was away from my desk in meetings and thought for sure I'd get filled since the RUT seemed to not move too much when I checked on it. Long story short, I canceled the spread order when I got back and watched the index and finally saw an ask that I felt comfortable buying the 790 back at, which was .25 and that allowed me to keep a little bit over 60% of the original credit that I took in. The ask got up to about .45 today but there was still no bid on the long strike. I am still deciding if I like the feel of the RUT, the danger seems to be a little exaggerated compared to SPX but it was good to see others writing today.

I knew Picc had 780, good move to get out.

sd
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I just got through reading the last 30+ posts. Interesting discussions there. I've always mix and match credit/debit/multiple calendars etc. that I don't sweat much about any one. There are merits to both sides, as debit spreads don't tie up margins like credits do, and that allows you some flexibility to do something else.

Mav, I've enjoyed many of your posts, but I think your last post about Donna was uncalled for.
 
Agreed, it was uncalled for.

Quote from Hybone:

I just got through reading the last 30+ posts. Interesting discussions there. I've always mix and match credit/debit/multiple calendars etc. that I don't sweat much about any one. There are merits to both sides, as debit spreads don't tie up margins like credits do, and that allows you some flexibility to do something else.

Mav, I've enjoyed many of your posts, but I think your last post about Donna was uncalled for.
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Quote from Hybone:

I just got through reading the last 30+ posts. Interesting discussions there. I've always mix and match credit/debit/multiple calendars etc. that I don't sweat much about any one. There are merits to both sides, as debit spreads don't tie up margins like credits do, and that allows you some flexibility to do something else.

Mav, I've enjoyed many of your posts, but I think your last post about Donna was uncalled for.
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Hybone, people either love me or hate me on ET. Those that love me usually do so because I really tell it like it is. I have nothing to sell so I really don't care what people think about me. I tell the truth and call a spade a spade. The people that hate me usually are the ones I go after. LOL.

I'll say this though. The rhetoric I spew on here, I spew in person. I run a group in Chicago that is the largest of it's kind in the country and is growing stronger every month. The reason people come is because I don't bullshit people. Some people like that, some don't. But it's who I am. When someone tells me they never have a losing month trading options, I'm going to call that person on that. I have worked with some of the best traders in the country in both NY and Chicago. Our top trader at my firm is going to have 100 mil under management. And for someone to make this claim, well, I'm going to say something.

Look, I don't know Donna from a hole in the wall. Maybe she really is the greatest trader that walked the earth. She has to be if that statement is true. But I play the odds, and the odds are, that statement is no where close to being accurate.
 
Maverick,

Donna has said just about every which way, that she's MAKING MONEY. Your theories don't matter. Let it go already........

Quote from Maverick74:

100% wrong. LOL.

As a brit might say, you are laboring under a false apprehension.
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Quote from andysmith:

Maverick,

Donna has said just about every which way, that she's MAKING MONEY. Your theories don't matter. Let it go already........
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Has nothing to do with whether she is making money or not. And I am not preaching theory. Options are pretty straightforward.
 
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