SPX Credit Spread Trader

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Quote from rallymode:

I agree 100%. If you base your trading style around the mentality that missed opportunity is better than lost money you will do so much better over the long haul.
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thx for the support and advice. it is tough without bouncing ideas off other traders.

with my 20/20 goggles on, risking 1.05 to squeeze out an extra .40 or so with less than 50% probabilities.....oh well

when the money's gone...it's time to move on...to may
 
Coach,

What is your experience with various brokers with regard to use of T-Bills to satisfy margin requirement for short options?

Dave

Quote from optioncoach:

Predominately in closed-end funds which pay monthly dividends. I have funds with municipal securities, corporate bonds, floating-rate loans, REITS, preferred stocks, convertible securities, MBS, private loans, treasuries and international bonds. The diversity takes a lot of the risk out of share price risk and lets me just focus on receiving my stream of income. I have a bunch of criteria but basucally I look for at least 6% yield, monthly dividends and trading at a discount. All that monthly income is good for the portfolio and the gains and losses in the CEF share prices pretty much cancel each other in most cases, but usually add another 1 - 3% on top of the 6% yields. I leave a portion in cash for adjustments and other debit positions and some in t-bills, although I am not in t-bills right now. My credit spreads margin ranges from 30 - 50% of total capital depending on how I feel (this thread covers one of my accounts). The monthly income from the CEFs acts as a nice hedge and boost of income and are used as margin to back up the spreads for the most part (50% of stock values, 100% of cash and 90% of t-bill value can be margined for credit spreads).

Phil
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Quote from volatilitypimp:

thx for the support and advice. it is tough without bouncing ideas off other traders.

with my 20/20 goggles on, risking 1.05 to squeeze out an extra .40 or so with less than 50% probabilities.....oh well

when the money's gone...it's time to move on...to may
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Here is something that i use when i am faced with the dilemma - to close early and give up credit or wait till the end. Maybe you can use it next time and save yourself some headaches.

Say you got a credit of $1 when you opened the spread. After whatever number of days the spread is now say $.3 with N number of days until expiration.

Take the credit you got initially completely out of the equation. Forget you even have the spread open. Remember, this credit isnt yours until expiration date or until you close the trade. Then ask yourself the question - Would i be opening this spread at this price level with the N number of days until expiration for only $.3 given whatever market bias/perception/direction you may have. Would that be a good trade to open? If the answer is no then you close the spread and give up the credit left.

This method has saved my ass countless times.
 
If you're close by, I suggest you just drop in.

The last one I attended I just walked in without anyone checking to see who I was or if I paid. I had paid and registered in advance, but nobody checked. There may be seats available when you get there.
 
Just wanted to share my April results:

3/10 opened calls with 1345/1355 for .55
3/28 opened puts with 1245/1255 for .50

closed calls on 4/13 for .05 debit
closed puts on 4/19 for .05 debit

After commissions I had a net gain of 7.7%. Not a bad month at all.

Currently I have a small May 1220/1210 put position but no calls.

ryan

p.s.- I am currently moving my money from OX to my TOS account. I cannot say enough about TOS, great software and customer service. I should have switched sooner!
 
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