SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Yes, just the spread. But the credit isn't necessarily equal on both sides of the IC. I like to time my entry, so sometimes I don't get as much for the latter spread.
My target return is based more on the initial spread. What I recieve from completing the IC is just a bonus.
You can always get good credit, be OTM and safe if using TA for entry time. Enter when oversold condition exists (PUT), overbought for Call. This way You can be 30, 40 point OTM and still get good credit. The market goes up and down. Matching your entry with TA gives you an hedge. I believe so. Rally technique is pretty good but I don't have the balls to be that close of the money.
I already got my target two weeks ago. I won't enter any call spread below 1350.
I am 100% cash; cash is good and I will wait for opportunities.
I already got my target two weeks ago. I won't enter any call spread below 1350.
I am 100% cash; cash is good and I will wait for opportunities.
Quote from Cache Landing:
Yeah, I think Rallymode is the only one here that positions himself closer to the underlying than I do.
I've mentioned a couple trades on here. Also, I keep a journal on a different thread. I started that journal from the standpoint of the small account novice, and based it on a $10,000 beginning account balance in Feb. Admittedly though, I have been trading options for the better part of a decade, so a true novice probably wouldn't trade the same way.
Anyway, my real account includes far more trades (and more aggressive) than that journal, as the journal is theme based. I have made every trade that I posted there though, only the size of the positions varied in my real account.
Well, I don't know about others but I would certainly like to follow any credit spreads that you place, if you don't mind sharing. I mentioned this before, but I have a feeling that the days of relatively "easy money" from FOTM spreads may be numbered. Meaning that, when the time comes, if I want to continue to trade spreads I'll have to go closer to ATM. So that's one of the reasons I'm interested in watching you and Rally trade to see your strategies, how you hedge, when you decide to just stay out of the market because it's too volatile, etc.
The trending/rangebound market is really a double-edged sword right now. It's easy to make some money selling premium, but the low volatility reduces those premiums. The most important thing is to decide what suits your personality. The more "aggressive" style isn't better or worse than the FOTM credit spread style. I don't really adhere to one or the other. Whatever trade gives me what is (in my mind) the best probability for reaching a target, that is the one I take.
rdemyan,
that's way I'm interested in backtesting this plan. I would love to know how this plays out in bull markets, bear markets, times of high volatility & low volatility. It would be interesting to find out when credits dry up to the point that using this strategy is not feasible.
that's way I'm interested in backtesting this plan. I would love to know how this plays out in bull markets, bear markets, times of high volatility & low volatility. It would be interesting to find out when credits dry up to the point that using this strategy is not feasible.
Credit spreads will be around for years to come, and they are a valuable tool in trading options. I prefer to have a few different choices when trading though. I'm not against debit spreads, long calls/puts, or other combos. When I find a stock/index setup that I like, I then determine what would be the best way to trade it. Many people search for stocks/indices to fit a strategy, I find a strategy to fit a stock/index.