SPX Credit Spread Trader

Does anybody know the market conditions that led to the 1987 crash?. I have this nagging feeling that things are heading that way.If SPX heads back to the 1295 Resistance and cant breakout, that might complete the dreaded Head and Shoulders pattern and we might have another crash.

what do you guys think?.
 
Quote from Aardvark:

I assume thats a call spread Crucis...I hope its a debt spread:confused: :eek: we have a way's to go guys the market could just melt up from here....
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Aardvark, it was a bear call. I got filled @ $2.00 instead of $1 as I first thought. I'm betting 1290 will hold as the next resistance. :D
 
Quote from Heatheranderson:

Does anybody know the market conditions that led to the 1987 crash?. I have this nagging feeling that things are heading that way.If SPX heads back to the 1295 Resistance and cant breakout, that might complete the dreaded Head and Shoulders pattern and we might have another crash.

what do you guys think?.
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FWIW Heather there really is NO correlation to the market today and 1987. The early 80's was a period of rising interest rates AND the market finally started moving north then...if memory serves..in 1987 there was something of an Asian crisis which precipitated the so called crash of 87. I say "so called" because the year had been so bullish a correction was certainly warranted. Yes the "crash" was big but if you hung in there you actually finished the year in positive territory. Market conditions from 2000 to today are nothing like 1982-1987 so I would not really worry that we are in a 1987 scenario. JMO
 
Quote from Heatheranderson:

Does anybody know the market conditions that led to the 1987 crash?. I have this nagging feeling that things are heading that way.If SPX heads back to the 1295 Resistance and cant breakout, that might complete the dreaded Head and Shoulders pattern and we might have another crash.

what do you guys think?.
More...

This thread has some discussions on it. Page 2 has charts comparing 87 and 06.

http://www.elitetrader.com/vb/showthread.php?threadid=69560
 
Quote from ready:

Does anyone know the first day the rest of the strikes for august will be listed and aprox the time frame in which they come out with new strikes ie every 60 days 75 days????
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Every stock will have options for (July and) August beginning Monday, following the June expiration.

Time frame for new options: Every stock has options expiring in the front 2 months plus two other expiration months that depend on its cyle. The cycles are Jan/Apr/Jul/Aug; Feb. May, Aug, Nov; Mar, Jun, Sep, Dec.

After expiration, one new month is added. For example, following the May expiration, every stock must have Jun and Jul options. If the stock did not have Jul, then Jul options were added. If It already had Jul the added expiration would be three months later than the last of the 3 already existing options (ignoring LEAPS).

If the new series to be added is Jan, and if the stock already has Jan07 LEAPS, then those LEAPS undergo a symbol change and become ordinary Jan options.

Mark
 
Hey folks, still dealing with family (mommie to be) issues but checking in and trading when I can. I am glad I grabbed my put spreads on the VIX jump and not too far from support at around 1245. It held and we jumped almost 40 points since then. If we move a little higher next week I might add call spreads and do the full condor.

If I missed a question, please re-post and I will do my best.

Some posts here are prompting me to remind eveyrone of some Coach advice. This strategy is like the SIREN's SONG, it lures you in with profits and a false sense of security and ego and you start to take excessive risks and the market then reminds you of who is boss and kicks you in the ass. This is not an easy strategy nor is it a conservative or simple one. It takes experience and skill in strike selection and handling the wide swings that could pop up in the market. Most importantly it takes a large amount fo risk management. First step I always say is never put 100% of your portfolio in it so you will never get wiped out.

Remember in the beginning of the year I took it slow with small positions (~ $125,000 or so) and did not ramp it up until MAR and now MAY. I do that to try and remind myself to not let a streak or ego take me out of my game.

As I pointed out, I tried to get cute with a 1255 short strike spread in MAY and the market hit 1246! Luckiliy it was AFTER MAY expiration and no adjustments were needed. I made a decision to hold the position based on TA. But getting cute almost cost me hard fought for money. Rather be ugly and rich than cute and crapping my drawers. So always check the ego and emotions at the door and remember that this strategy takes skill and effort and nothing is easy.
 
Coach, good to hear from you.

I have a question on the risk reversal that riskarb suggests for the bull puts. I'm not sure I understand how this works? Is this where you sell a call to finance the purchase of a put that provides downside protection? If so, then given the margin requirements on the SPX, a bear call might work better, but the collected premium would be lower.

Any insight you can provide is greatly appreciated.

Quote from optioncoach:

Hey folks, still dealing with family (mommie to be) issues but checking in and trading when I can. I am glad I grabbed my put spreads on the VIX jump and not too far from support at around 1245. It held and we jumped almost 40 points since then. If we move a little higher next week I might add call spreads and do the full condor.

If I missed a question, please re-post and I will do my best.

Some posts here are prompting me to remind eveyrone of some Coach advice. This strategy is like the SIREN's SONG, it lures you in with profits and a false sense of security and ego and you start to take excessive risks and the market then reminds you of who is boss and kicks you in the ass. This is not an easy strategy nor is it a conservative or simple one. It takes experience and skill in strike selection and handling the wide swings that could pop up in the market. Most importantly it takes a large amount fo risk management. First step I always say is never put 100% of your portfolio in it so you will never get wiped out.

Remember in the beginning of the year I took it slow with small positions (~ $125,000 or so) and did not ramp it up until MAR and now MAY. I do that to try and remind myself to not let a streak or ego take me out of my game.

As I pointed out, I tried to get cute with a 1255 short strike spread in MAY and the market hit 1246! Luckiliy it was AFTER MAY expiration and no adjustments were needed. I made a decision to hold the position based on TA. But getting cute almost cost me hard fought for money. Rather be ugly and rich than cute and crapping my drawers. So always check the ego and emotions at the door and remember that this strategy takes skill and effort and nothing is easy.
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