SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Yup I was looking at the date and assuming Friday. If the news is bad I am shorting futures at 8:30 AM and letting them ride all day lol....
Yeah, today was a real "thumper" and really tests your trading philosopy and mental toughness. If you're still holding May positions I would be cautious about the SET and my personal preference would be to close anything that made me nervous. What was it that Coach said...a knife in the leg or a bullet to the face? Geez, that's a grusome choice! 
On the brighter side of things, and as option traders every dark cloud does have a silver lining, this is a nice opportunity to take a look at June put spreads!
Heather, sorry to hear about your struggle. What I can tell you is that once you shake it off and figure out how to better handle this sort of drop, you're going to be that much more effective in the future.
Good luck everyone!
On the brighter side of things, and as option traders every dark cloud does have a silver lining, this is a nice opportunity to take a look at June put spreads!
Heather, sorry to hear about your struggle. What I can tell you is that once you shake it off and figure out how to better handle this sort of drop, you're going to be that much more effective in the future.
Good luck everyone!
Coach,
Always nice to hear your reasoned and calming words of wisdom. Now that we seem to care more about interest rates and less about the strength of the economy, is good news tomorrow bad news? or is bad news good news? or is good news good and bad news bad?
I would just like to know what I am hoping for!
Always nice to hear your reasoned and calming words of wisdom. Now that we seem to care more about interest rates and less about the strength of the economy, is good news tomorrow bad news? or is bad news good news? or is good news good and bad news bad?
I would just like to know what I am hoping for!
Heather,
Sorry to hear what happened.
After watching the market move. I have decided to only play bear call spreads. Maybe put diagonals and cheap put butterflies.
No more bull put spreads unless:
1) we break to the upside - out of a long downtrending channel
2) we start a new trading range - after a distinct up/down move.
Market moves too fast to the downside.
Cheryl
The best thing that could happen the next two days is quiet consolidation so we can all pause and take this in
..... and so I can let my MAYs expire and maybe grab a small JUNE position while vols are juiced...
..... and so I can let my MAYs expire and maybe grab a small JUNE position while vols are juiced...
I'd like to add something to coach's words of wisdom if he doesnt mind.
For all the new traders/lurkers out there following this thread. Perhaps, the last few days have been a wake up call to all of you. Whether you were in a position or not, you have seen first hand the effects of a swift move in the index. My suggestion and that's all it is, a suggestion, that in the future you are mindful of the risks that the FOTM credit spread brings. I am sure coach has said this many times before but if you are not sure you know exactly how to handle the swift moves you are best to stay out.
The FOTM credit spread is one of those ways to trade options where if you are not sure you know exactly what you are doing(and as a new trader you dont), you better not attempt it at all. Just my thoughts.
For all the new traders/lurkers out there following this thread. Perhaps, the last few days have been a wake up call to all of you. Whether you were in a position or not, you have seen first hand the effects of a swift move in the index. My suggestion and that's all it is, a suggestion, that in the future you are mindful of the risks that the FOTM credit spread brings. I am sure coach has said this many times before but if you are not sure you know exactly how to handle the swift moves you are best to stay out.
The FOTM credit spread is one of those ways to trade options where if you are not sure you know exactly what you are doing(and as a new trader you dont), you better not attempt it at all. Just my thoughts.
VIX update.....
My MAY VIX calls did not budge on today's VIX mini spike to over 16 because the VIX options expire on Tuesday. So nothing to learn there.
BUT, the JUNE 15 Calls were up $0.50 today to $.90/$1.05 on the bid/ask spread. So we are seeing some move in the ATM calls on VIX with time left to expiration will be interested in seeing how it tracks VIX from here on out..
My MAY VIX calls did not budge on today's VIX mini spike to over 16 because the VIX options expire on Tuesday. So nothing to learn there.
BUT, the JUNE 15 Calls were up $0.50 today to $.90/$1.05 on the bid/ask spread. So we are seeing some move in the ATM calls on VIX with time left to expiration will be interested in seeing how it tracks VIX from here on out..
I experimented with DD trade Jun/Jul yesterday.
1265/1290 1300/1325 for total credit of $4.20.
With today drop in SPX to 1270, the DD has paper lost of $105.
I opened 3 contracts on 1260/1250 may put and may be subjected to stupid trade of the year for me. I also posted the time of the trades and the filled. For today, It is much easier to get filled near the mid at the end of the day.
Date: Wed, 17 May 2006 14:30:52 -0500 (CDT)
Subject: SOLD -1 VERTICAL SPX 100 MAY 06 1260/1250 PUT @1.10 CBOE, SPX MARK 1273.75
Date: Wed, 17 May 2006 15:03:57 -0500 (CDT)
Subject: SOLD -1 VERTICAL SPX 100 MAY 06 1260/1250 PUT @1.60 CBOE, SPX MARK 1270.32
Date: Wed, 17 May 2006 15:14:50 -0500 (CDT)
Subject: SOLD -1 VERTICAL SPX 100 MAY 06 1260/1250 PUT @2.00 CBOE, SPX MARK 1270.32
1265/1290 1300/1325 for total credit of $4.20.
With today drop in SPX to 1270, the DD has paper lost of $105.
I opened 3 contracts on 1260/1250 may put and may be subjected to stupid trade of the year for me. I also posted the time of the trades and the filled. For today, It is much easier to get filled near the mid at the end of the day.
Date: Wed, 17 May 2006 14:30:52 -0500 (CDT)
Subject: SOLD -1 VERTICAL SPX 100 MAY 06 1260/1250 PUT @1.10 CBOE, SPX MARK 1273.75
Date: Wed, 17 May 2006 15:03:57 -0500 (CDT)
Subject: SOLD -1 VERTICAL SPX 100 MAY 06 1260/1250 PUT @1.60 CBOE, SPX MARK 1270.32
Date: Wed, 17 May 2006 15:14:50 -0500 (CDT)
Subject: SOLD -1 VERTICAL SPX 100 MAY 06 1260/1250 PUT @2.00 CBOE, SPX MARK 1270.32
Rallymode, I have read some of your recent posts, and still not sure what you are proposing as the alternative to the FOTM credit spreads. Are you suggesting butterflies -- long wings and short body? or close in ATM spreads, etc.
Could you give us some specifics of your trading plan. I am one of those traders who has lost a great deal of money on the FOTM spreads.