SPX Credit Spread Trader

[rdemyan]

Shams:

You can do better than that with ToS. Send them an e-mail or call them up and say you want the $1.25 per option commission that was extended to TheOptionClub.com.

I think that this pricing is still available. Also, I think if you mention Coach Phil, you can also get that commission rate.

Quote from Shams78:

I'm with ToS so commissions are 2.95 per option or 9.95 ticket with 1.50 per option, which ever is less.

 

[Shams78]

I've read almost have the posts so I'm aware of risk management, an how important it is. I've learned from doing mostly directional trades on stocks over the last year how important risk management is. Although I've come out ahead over the past year with directional plays in options the volatility with this strategy makes it very difficult. I'm a little more risk averse now as my day job has not allowed me to follow my position as close as I would like.

As far as this credit strategy I would be looking to place front month OTM Spreads at least 1 SD out.

 

[ryank]

TOS is showing volume of 124,016 for the May 1195 puts and 119,598 for the May 1225 puts. That's a lot of contracts! Huge volume on 1380 and 1400 calls too.

ryan

 

[Shams78]

rdemyan,

That's a great rate from ToS. Do you pay a ticket charge with that 1.25/option? If I mention theoptionclub and coach Phil they'll grant me this rate, is there a required account value to get this rate.

 

[rdemyan]

Yeah, I'm sort of in the same boat. Although you would think I'm a man of leisure (based on the number of posts today), I'm a consultant and travel quite a bit. On Tuesdays I travel all day and can only call to get quotes two or three times during that day. God help me if I ever have to adjust on a Tuesday.

If you're looking to avoid the volatility you may have to go further out than one standard deviation. If you don't feel you have the time to monitor the positions as closely as you would like then I'd recommend you stay FOTM. Scan the posts and see how all of us at one time or another have really sweat it out (although I think Coach has only perspired once or twice) as the SPX has approached our short strikes. Check out who is placing what trades but definately be aware if they are a full-time trader or working stiffs like you and me. In general, the full-time traders are taking on more risk (in terms of being closer ATM), but they have pretty much all been successful. I recommend you look at where Coach is placing his positions and then go from there. Admittedly he's been more conservative lately, but he and his wife are having a baby, and that'll do that to a man.

Quote from Shams78:

I've read almost have the posts so I'm aware of risk management, an how important it is. I've learned from doing mostly directional trades on stocks over the last year how important risk management is. Although I've come out ahead over the past year with directional plays in options the volatility with this strategy makes it very difficult. I'm a little more risk averse now as my day job has not allowed me to follow my position as close as I would like.

As far as this credit strategy I would be looking to place front month OTM Spreads at least 1 SD out.

 

[rdemyan]

Nope, no ticket charge. I don't know about the minimums required. You'll have to ask. If you do find out, please post for our benefit as well.

Quote from Shams78:

rdemyan,

That's a great rate from ToS. Do you pay a ticket charge with that 1.25/option? If I mention theoptionclub and coach Phil they'll grant me this rate, is there a required account value to get this rate.

 

[JimPos]

Quote from rdemyan:

Sorry, my typo. It was 1345/1355. I know at some point I will have to be worried about set but I will either close the position or roll out if the SPX gets within 10-20 points of my short strikes. I can understand why coach just closes his positions. It just eliminates the whole problem. Thanks for the input.



Jim:

Congrats on a nice month and welcome to the board. Was your bear call really a 1345/1385 or did you mean to write 1345/1355?

Edit: If your new to trading the SPX be especially careful of the SET (SPX settlement on Friday after Thursday expiration). I wasn't even aware of this when I started trading the SPX (my bad since I should have done more research), and I was lucky back then that it didn't bite me. But I know of a couple of very experienced traders who took the SET lightly and got massacred on settlement day. It's not hard to take it into account in your trading and since your being brave and reading through this thread, Coach talked about it in length. But if you're not sure about it, be sure to ask.

 

[Cache Landing]

It's not as much about account minimums as it is about trade volume.

 

[El OchoCinco]

Yeah the ToS rate I think kicks in at 10 contract minimums to get $1.25 a contract flat (which also translates to $12.95 minimum rate). If you are easily doing spreads of 10 contracts or more then ask for the rate. Mentioning TheOptionClub or CoachPhil (really only Tom or Joel know me) where they have given that rate before just might make it easier to get.

Quote from Shams78:

rdemyan,

That's a great rate from ToS. Do you pay a ticket charge with that 1.25/option? If I mention theoptionclub and coach Phil they'll grant me this rate, is there a required account value to get this rate.

 

[RichardRimes]

I do believe its a 10 contract minimum....I don't think I do the volume...just negotiate your best deal!