SPX Credit Spread Trader

[rsflint]

Quote from rdemyan:

Nice start and welcome. Just out of curiousity, how far in advance of expiration did you put on your positions. Did you place the entire IC at once or each credit spread at separate times.

Thanks for the question rdemyan. On Monday 3/20 just after March options expired, I tried to get in on a full Iron Condor via OX but didn't get filled. So I decided to leg in. On Tuesday March 21, got filled on the PUT side -- then Wednesday March 22, got filled on the CALL side. A friend of mine got filled 1360/1370 for about the same credit I believe Monday 3/20..I had to go a little tighter because SPX settled down some by Wednesday 3/22.

Rookie Rich

 

[Sailing]

ET traders,

Now that taxes have come and gone, would people be interested in sharing total NET portfolio performances for the past six years, 2000-2005, year at a time?

I'm asking as a learning & sharing reflection as to how different trading styles and strategies have faired under such diverse market conditions.

Even some commentary as to what things you learned, changed, modified, wouldn't do again, etc.

Any thoughts?

Murray

 

[andysmith]

Donna, I agree. I've spent most of my efforts in the area of getting a good handle on directional bias (not just price-based TA, but volume, market internals, SPX's leading indicators, the bond market's behavior, put/call ratio,...). IMO getting a handle on directional bias is almost as important as risk management.

Quote from DonnaV:

.... I think our overall judgment of where the mkt will go also dictates where we are willing to accept the greater risk.

 

[volatilitypimp]

Quote from andysmith:

Donna, I agree. I've spent most of my efforts in the area of getting a good handle on directional bias (not just price-based TA, but volume, market internals, SPX's leading indicators, the bond market's behavior, put/call ratio,...). IMO getting a handle on directional bias is almost as important as risk management.

I disagree with this mode of thinking in order to be successful with iron condors. The whole point of an iron condor in my opinion is to not care that much as to the direction, just as long as it stays within your predetermined range for as long as you hold the position.

Me personally, I usually put the whole thing on in one day and hope to remove it or let it expire, earning max credit.

I think people are more or less spinning their wheels trying to determine market direction for IC's. Honestly, I put the IC on every month without an ounce of TA, and I'm sure I do as well as most technicians. of course speaking ecclesiatically, there's a time for everything, and TA is better suited for directional trades(imo).

I just can't see TA being important for this strategy. As long as your spreads are 1 sigma or greater, you can expect to adjust roughly one out of four times as a general guideline.

For fear of raising the TA sycophant's ire, i won't comment further.

 

[mschey]

Quote from andysmith:

Donna -- occasionally I am, more on the call side than puts. Working out OK. It can cut down on returns but I've become much less greedy than when I started out, so it's not a problem. It's kinda like this: say your margin is $100k. You'd like to make $10k/month. Now say you grow your account such that your margin is $200k... hey presto! You're still ok with around $10k/month and less risk... funny how that works. The flip side of this is that when one has an account value of say, $5k, they want to grow it to $100k in a year. That's close to impossible!

I thought you guys(and gals) were doing around 4% per month...are you getting 10% a month?

 

[RichardRimes]

I have been...but VP I think its a good discussion...your viewpoint is valid.

 

[RichardRimes]

Quote from mschey:

I thought you guys(and gals) were doing around 4% per month...are you getting 10% a month?

Its kinda hard to say 10% of what? for me its buying power that I have to set aside and it ranges from 75k to 230k (this month for about 5 days). I made 12 trades during march to get my result which was abt $20950 (for april) March I only got $7000...so it certainly varies as to how hard you work your trade or if you spend a lot in hedges...I did in March because I thought the vol's would increase (spend in hedges) Jan and feb were pretty easy because the spx was very tame and both months I got %10 on BP on the trade.

 

[RichardRimes]

The other thing is Coach did not chose to sell a call spread in Jan feb or Mar...the only reason I and others do more % wise is that we have been doing an IC...which has perhaps greater risk but doesn't cost anymore margin or buying power...choices

 

[Hybone]

Quote from volatilitypimp:

I disagree with this mode of thinking in order to be successful with iron condors. The whole point of an iron condor in my opinion is to not care that much as to the direction, just as long as it stays within your predetermined range for as long as you hold the position.

Me personally, I usually put the whole thing on in one day and hope to remove it or let it expire, earning max credit.

I think people are more or less spinning their wheels trying to determine market direction for IC's. Honestly, I put the IC on every month without an ounce of TA, and I'm sure I do as well as most technicians. of course speaking ecclesiatically, there's a time for everything, and TA is better suited for directional trades(imo).

I just can't see TA being important for this strategy. As long as your spreads are 1 sigma or greater, you can expect to adjust roughly one out of four times as a general guideline.

For fear of raising the TA sycophant's ire, i won't comment further.

I agree with your point of an IC to not care about direction but only about ranges ... afterall, that is the strategy of an IC. However, I disagree with your opinion/assessment that people are spinning their wheels about market direction when implementing an IC.

Let's say you've been analyzing the market on a regular basis, and you have relatively good experience with general market sentiment and many of the factors that contribute to how the markets move, then you can develop a directional "bias". This is not to say that you can predict market directions with certainty, but just that over the years you gained experience and can have confidence/conviction in your your assessment. This, plus the use of TA can benefit your IC positions by bringing in more premium. For example, due to the current market conditons my directional bias for the SPX for May is bearish. So my May call spread was put on last Thursday based on my opinion that the SPX is close to, or is already at a temporary top. From there on, you can take advantage of the increased premium for the put side on the way down to leg into the IC if you so desire. This would give me potentially more premium (even considering theta effects) than entering the complete IC right now. I believe a few on this thread leg in for the same reason. It is just a personal preference.

 

[andysmith]

80% of my trades are not ICs....

Quote from volatilitypimp:

I disagree with this mode of thinking in order to be successful with iron condors. The whole point of an iron condor in my opinion is to not care that much as to the direction, just as long as it stays within your predetermined range for as long as you hold the position.

Me personally, I usually put the whole thing on in one day and hope to remove it or let it expire, earning max credit.

I think people are more or less spinning their wheels trying to determine market direction for IC's. Honestly, I put the IC on every month without an ounce of TA, and I'm sure I do as well as most technicians. of course speaking ecclesiatically, there's a time for everything, and TA is better suited for directional trades(imo).

I just can't see TA being important for this strategy. As long as your spreads are 1 sigma or greater, you can expect to adjust roughly one out of four times as a general guideline.

For fear of raising the TA sycophant's ire, i won't comment further.