SPX Credit Spread Trader

piccon · May 12, 2006

Bought SPY 129 @0.70 Now 1.50. Put a stop @1.40. 100% guaranted

I am looking for some debit spread. We should see a bounce by beginning of next week.

Quote from optioncoach:

Wow, 100 spreads at $1.80 = $18,000 cost. Must have baggy jeans to support those balls .

My advice for s#its and giggles..... try and grab the 1305/1310 bull call spread for about $2.00 and lock the box for $3.80 and a guaranteed profit of $1.20 or $12,000 for a return of 66% Yawn...

Nice job..

rallymode · May 12, 2006

Quote from Cache Landing:

On a different note... It seems that you might have traded the wrong strategy for that index. Many people get married to a certain strategy and will trade it regardless of the issue. I find the issue/setup and then determine the appropriate strategy.

i agree. credit spreads on the NDX arent much safer than credit spreads on individual issues. If you are gonna go that way then you better be prepared for days like these.

In my opinion the premium that you get with the NDX credit spreads isnt worth risking the swings compared to credit spreads on a more muted index.

riskarb · May 12, 2006

Quote from piccon:

Bought SPY 129 @0.70 Now 1.50. Put a stop @1.40. 100% guaranted

I am looking for some debit spread. We should see a bounce by beginning of next week.

There are no guaranteed stops in options.

rallymode · May 12, 2006

Quote from piccon:

Bought SPY 129 @0.70 Now 1.50. Put a stop @1.40. 100% guaranted

Instead of a trailing stop, you could close half and turn the other half into a bear put spread. June is a long way from now and things dont look very rosy at this point.

just an idea of how to manage the trade.

riskarb · May 12, 2006

Quote from optioncoach:

Sometimes the OTM spreads are easier to fill than the ITM spreads so the 1305/1310 OTM bull call spread might be easier to fill at $2.00 for a $1.20 profit locked in over trying to get out of the $1.80 spread at $3.00. Of course you take the higher profit but we could rally back into next week to 1310 so offering the choice of selling or locking in now as a consideration..

The otm bull vertical is nearly as wide as the itm bear. Ridiculous spreads on SPX, absurd.

piccon · May 12, 2006

I was going to do that and then it was sold @1.42. Still 100%

I am ok with that. I didn't want to keep a regular PUT over the weekend. I did open it as a potential hedge for my June Bull PUT but I still don't see the BULL PUT yet. Waiting for TA confirmation.

Quote from rallymode:

Instead of a trailing stop, you could close half and turn the other half into a bear put spread. June is a long way from now and things dont look very rosy at this point.

just an idea of how to manage the trade.

rallymode · May 12, 2006

Quote from piccon:

I was going to do that and then it was sold @1.42. Still 100%

I am ok with that. I didn't want to keep a regular PUT over the weekend. I did open it as a potential hedge for my June Bull PUT but I still don't see the BULL PUT yet. Waiting for TA confirmation.

are you saying you just closed your hedge for your june bull put position?

El OchoCinco · May 12, 2006

The ITM put spread is a little worse so one owuld have to compare which is better if closing today was the choice. 1300/1295 levels of support might hold so I would worry about a pullback slightly into next week which would erase some nice gains on that huge position that was put on.

Another option is to add the 1300/1305 put credit spread for a FLY with at least $0.30 credit perhaps. On 100 spreads that is $3k minimum with potential for much higher profits...

Quote from riskarb:

The otm bull vertical is nearly as wide as the itm bear. Ridiculous spreads on SPX, absurd.

riskarb · May 12, 2006

Quote from optioncoach:

The ITM put spread is a little worse so one owuld have to compare which is better if closing today was the choice. 1300/1295 levels of support might hold so I would worry about a pullback slightly into next week which would erase some nice gains on that huge position that was put on.

Another option is to add the 1300/1305 put credit spread for a FLY with at least $0.30 credit perhaps. On 100 spreads that is $3k minimum with potential for much higher profits...

Sure, but the box IS a synthetic offset. The fly is a good idea as I wouldn't want to carry the upside risk.

rallymode · May 12, 2006

I think this selloff is getting ahead of itself. So far the 1295 level is holding. If we manage to close >1300, we might get a nice bounce going into the PPI/CPI numbers. What happens after that would depend on who Maria Bartiromo talked to over this weekend LOL