SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Coach,
Were you a student of Bentley College? It is a nice school in Waltham. I live in Newton, Mass., 10 miles from Waltham. I wish you can come back to Waltham for a visit. I have your book. It was my birth day gift from my daughter. I would like to have your signature on the book. I have learned a lot from reading your book and your posts as well as others'. I feel very lucky to find this excellent thread. Every day after work, I always to check with this thread first.
Cody, do you know are there any options trader clubs in Boston area?
I do not know of any clubs in the Boston area. When I was at the TOS seminar I did hear a couple of guys speak of a group that meets at MIT on Saturday mornings. But I did not get any more info.
Close.... I was at Brandeis, the other school in Watham 
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Glad you are getting something out of the book and this thread, I know I certainly have.
.Glad you are getting something out of the book and this thread, I know I certainly have.
should be in good shape...the only threat I can think of is to the 1240's but you should be ok.. I have 1250's puts so if I adjust I'll holler
I do -- My plan is to not get any closer than 7 points OTM from the short strikes and roll. Some details: once SPX gets near or hits 10 points out from either of my short strikes, I'll look at rolling into a new position after checking technical analysis, overall market, etc. If it looks like there is strong support in the case of a downward slide towards my short put strike I may wait but if it drops another 3 points I'm out for sure.
So far so good ..46 points above put strike, 49 points below call strike..but time will tell
What is your plan?? What % do you allocate for adjustments?
Rookie Rich
Before I put on my position I first determine how much I'm willing to lose if this trade goes wrong -- call it Max Loss. Then I look at the loss of the unhedged spread if the underlying is 5 points from my short strike. I look at this loss at two points in time: one week after putting on the spread and one week prior to expiration, both at different projected IVs. Then I allocate a portion of the credit I expect to receive to create some hedges such that I "dial in" this loss to equal my Max Loss. Basically, I pre-set into the position what I can stand to lose should things go against me.
Quote from rsflint:
I do -- My plan is to not get any closer than 7 points OTM from the short strikes and roll. Some details: once SPX gets near or hits 10 points out from either of my short strikes, I'll look at rolling into a new position after checking technical analysis, overall market, etc. If it looks like there is strong support in the case of a downward slide towards my short put strike I may wait but if it drops another 3 points I'm out for sure.
So far so good ..46 points above put strike, 49 points below call strike..but time will tell
What is your plan?? What % do you allocate for adjustments?
Rookie Rich
Believe me, it was tough. I tried to stay a nickel in front of the mid all day, but on the last leg lower to ES 1304.25, they grabbed them, which happened to be the LOD. Man, the premiums this month are hard to come by. Frustrating, but luckily, I can watch the market all day and grab this stuff sometimes. Not very often though. In this instance, I believe it's either a fluke or we're gettin' ready for a steep decline. Definitely a weird month so far.
Quote from DonnaV:
should be in good shape...the only threat I can think of is to the 1240's but you should be ok.. I have 1250's puts so if I adjust I'll holler
Thinking the same Donna. Since 1240 is below the 200 dma and we're 22 days out, I thought I'd give it a try. Plenty of strikes open for June now to roll too, so if we get a substantial break, that's where I'm headed. I may also use the SPY's to hedge off some of that risk if it starts to get carried away.
Thanks for your input Donna. Holler if you decide to bail to June. I'll be watching...