SPX Credit Spread Trader

Coach and rallymode (and others...)
Dust has settled down.my earlier reply was an emotional reaction.i think everyone will benefit(including me) if you discuss what would have been the best possible exit for my position. Its a great experience to have gone through and i would like to be prepared the next time.
Was my entry bad?. because i based it on the support and was expecting a bounce.I know the exit was really bad.I had plenty of time to get out but i hoped it would expire worthless.

my positions: 50 RUT- May 810/820 Bear Call -- credit $0.80
50 RUT- May 730/720 Bull Put -- Credit $.60

thanks,appreciate it guys.
 
Quote from Heatheranderson:

Coach and rallymode (and others...)
.I had plenty of time to get out but i hoped it would expire worthless.

my positions: 50 RUT- May 810/820 Bear Call -- credit $0.80
50 RUT- May 730/720 Bull Put -- Credit $.60

thanks,appreciate it guys.
More...

when you say you had plenty of time to get out...at what price? You HOPED it would expire worthless..Heather, if you read your own words you will find your answers. Your analysis was obviously wrong and you didn't close the spread when the short put was breached. Waiting until it was 5 pts ITM was foolish, you will be taken to the cleane's EVERY time:( I don't know the RUT so I'm assuming you do. No one will beat you up more than YOU will...so profit from the error and move on.
 
Aardvark
I am aware of my emotion HOPE and thats what i was trying to explain to Rallymode. I got an oppertunity on tuesday and wednesday to close it out at $1.80 but ...
 
I still believe, RUT 730/720 can be safe by expiration. I would never accept 0.80 or 0.60 for RUT. I don't trade RUT or SPX for less than 1.00 credit.

I own some RUT for June but I get at least 1.50 on each side

For such volatile index You need to trade them when they are overbought or oversold although it's difficult to detrermine the right OS or OB time but the TA will PUT you closer to the money and get the best premium possible.

Today I bought some SPY calls and RUT calls because the market should turn positive at least temporary. I will do my best to convert them into Bull Calls whenever possible.


Quote from Aardvark:

when you say you had plenty of time to get out...at what price? You HOPED it would expire worthless..Heather, if you read your own words you will find your answers. Your analysis was obviously wrong and you didn't close the spread when the short put was breached. Waiting until it was 5 pts ITM was foolish, you will be taken to the cleane's EVERY time:( I don't know the RUT so I'm assuming you do. No one will beat you up more than YOU will...so profit from the error and move on.
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Hi Heather:

Since you're asking for advice or comments, let me give you my opinion:

1) Don't trade the RUT. Stick with the SPX. Relatively speaking it is slower moving and not as volatile. Plus the RUT MMs are the worst when you try to get out and they sense "blood in the water".

2) Post more frequently in the forum. Perhaps if we had known the problem earlier, we might have convinced you to get out during those "getting out" opportunities you mentioned. I know that posting in this forum more frequently has helped me a lot.
Plus there is frequent discussion on risk management and IMHO it's important to keep this in the forefront when trading.




Quote from Heatheranderson:

Aardvark
I am aware of my emotion HOPE and thats what i was trying to explain to Rallymode. I got an oppertunity on tuesday and wednesday to close it out at $1.80 but ...
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Quote from rallymode:

thanx, i think you and cache are the only ones who read them though LOL

oh that was risk 2 to make 1 earlier, no way you can do the reverse unless you go ITM
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Hey, don't drag me into this. I'm switzerland on this thread.:D I don't think it is bad to trade FOTM, and in all fairness I think that OC has explained risk management and adjustments enough for those who are willing to read from the beginning.

OTOH, I don't disagree with the points you are making regarding FOTM spreads. We all know that I'm not at all against (actually prefer) selling closer to the money if not ATM. Just a personal preference though. I like near ATM the same way OC likes FOTM. Just simply my kind of trading.

Anyway, I think the best thing a trader can do is to figure out what style fits him best and specialize in it. Other strategies can be learned along the way.:p
 
Rallymode

I agree with many here, your posts are of great benefit as are coach's. I have learned alot from all of you and am very curious to know how and with what criteria do you make adjustments when an ATM credit spread is threatened. Do you roll and add to your position, bail out, or what. I apologize if you have forwarded this info elsewhere on this thread, ifso please direct me there. All responses welcome

Thanks for your time
 
Quote from rallymode:

thanx, i think you and cache are the only ones who read them though LOL

oh that was risk 2 to make 1 earlier, no way you can do the reverse unless you go ITM
More...

I'm having way to much fun on this board and learning a lot about a new strategy (to me) from you so please keep typing :D . Between you and Cache, I am just about converted to the near the money 5 point spreads :cool: .
 
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