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SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Rally,
So you're saying that some benchmarks need to be established, such as 10-pt spread, 27 days to exp, 60 pts OTM,... should give $xyz credit?
So you're saying that some benchmarks need to be established, such as 10-pt spread, 27 days to exp, 60 pts OTM,... should give $xyz credit?
Quote from rallymode:
Yes, but its not how wide the spread is that disturbs me, i do 10 point spread sometimes too, it's the lack of consistency in entries as a function of credit "collected", time to expiration and max risk.
Quote from rallymode:
I dont want to be the black sheep of the thread but it sounds like many people on this thread use too much discretion when it comes to entries and credit sought. What i mean by that is, once you see the credit you seek you put more weight to the credit "collected" and less weight to its relation to the underlying and time to expiration.
You guys probably dont see it now but if you measure your results over a 12-24 month period you will probably do alot better if you systemize your entries based on optimal credit as it relates to the current price and time to expiration for the max risk at hand.
An example of what i am talking about is this:
You could've gotten that same credit at half the risk just 5 days ago.
I hope i am not offending anyone with this statement but its an observation that has bothered me for some time now. Afterall, it's your money.
I believe its always good to question...food for thought... having said that and speaking only for myself...I need to trade in a way that works for me. I believe as soon as I would (if I could) develope a "system" the market would change and my system would no longer be valid. If I learn an equity or index and follow it over a period of time then I can "feel" or "sense" when it is overbought/oversold...I trust my senses. Am I always right? No...but there is where the risk management kicks in and when I am proved wrong I bail.
Dan Sheridan in his web cast said options trading is a craft....craft by definition has an art component, it is much more than just science or mathmatical models so for me a "feel" or sense is just as good as the black box.
Could I be more effective and make more money doing what you do? Possibly but I'm pretty happy with how I'm doing now...more importantly I'm comfortable. If I traded like you do (and I have no critism of it) I would be very uncomfortable. my 2 cents
Oh ChrisM thanks for the link!
Quote from DonnaV:
If you go to "think spreads" and type in spx you'll see all the spx spreads currently running...I put mine on abt 10:58 mdt and saw a 5 lot put on at abt 11
Donna, Thanks. I definitely need to take more time learning the powerful tools in ToS. I went to the TOS seminar, but was before I had tried the software and it was hard to follow. I plan to repeat when it comes back to Scottsdale. Thanks again
Just a quick question for all you TOS fans out there. I find myself using the "probability of touching" function frequently, rather than the "probability of expiring".
While the premium for these credit spreads is based more on POE, it seems that the adjustment strategy for most on this thread is to adjust long before the short strike has been breached. In this case, I find the POT function to be much more helpful. What's everyone else's view on it?
While the premium for these credit spreads is based more on POE, it seems that the adjustment strategy for most on this thread is to adjust long before the short strike has been breached. In this case, I find the POT function to be much more helpful. What's everyone else's view on it?
Quote from Cache Landing:
Just a quick question for all you TOS fans out there. I find myself using the "probability of touching" function frequently, rather than the "probability of expiring".
While the premium for these credit spreads is based more on POE, it seems that the adjustment strategy for most on this thread is to adjust long before the short strike has been breached. In this case, I find the POT function to be much more helpful. What's everyone else's view on it?
I've just started using it more...especially when we get close to a short strike...I have found bot POT and POE very useful in both opening and closing a trade
Quote from ryank:
What are the new multi-colored tags next to the symbol box for in the updated TOS software today? I haven't figured out what they are to be used for.
New software update includes a lot of stuff. Check out the e-mail that you should've received yesterday.
{edit} In short, it allows you to tie a ticker to multiple functions so that you can jump from one ticker to another without having to enter the ticker on each different page. IOW, you can link AAPL to the red tab and when you click it, you should be able to jump from the trade tab, to the analyze, to the charts, and AAPl will be displayed in all of them.