SPX Credit Spread Trader

MoMoney,

Thanks for the links. I believe I've grapsed (at least, in part) the concept of a "no cost" hedge or the low cost "debit spread"as you have explained it. Perhaps I may use this concept as a way to trade versus merely hedging another position.

Are there any other resources that go into this type of setup in detail that you are aware of?




Quote from momoneythansens:

I probably need to rewrite these to make them clearer:

http://www.elitetrader.com/vb/showthread.php?s=&postid=971374#post971374

http://www.elitetrader.com/vb/showthread.php?s=&postid=1095103#post1095103

Double pay day = "Convergence gains"
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M-

The prop will give you better margining for multiple positions. SO you have to analyze whether you want cross-margining and friendlier haircuts and better interest earned on cash.

Quote from Sailing:

Rally,

Did you say you're using IB for your Broker?

I'm looking at teaming up with Vtrader, (Maverick), and just wondering how you like IB and the platform.

M~
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IB software is getting better.

Plenty of excellent third-party front ends to overcome native deficiencies in charting and day trading etc.

The same though, cannot yet be said for option trading. IB's option trader is in the dark ages from a usability, order entry and analysis point of view compared to other solutions IMO :(

Still, breadth of products and markets offered can't be sneezed at :)

Quote from rallymode:

Love it, wouldnt trade it for anything on the retail level. It takes some getting used to when you first start but then it provides a very efficient way of quoting/trading. In my opinion, IB is the closest to prop you can get on the retail level. Charts suck but i dont daytrade so they arent too important to me.
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I still haven't read it yet (Sorry Phil), but I believe Mr.Budwick's book covers some of these concepts? Someone can confirm or deny. Not sure if it looks at it from a gamma scalping perspective though.

Agree, trading this concept as the position outright rather than as a hedge is a viable route!

The caveat is that this strategy works when it works and you need good directional skills to execute it :D

MoMoney.

Quote from scienter:

Are there any other resources that go into this type of setup in detail that you are aware of?
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June results.

ES 1355/1360 $1.75 credit expiring worthless

SPX 1235/1240 $1.2 closed at $.40

SPX 1235/1240 $1.5 credit closed at $1.5

June Profit: $2.55
June Return on Risk: 67%
June Max Port Risk: 5.6%

YTD Port Gain: 32.6%
Average Port Risk: 6%

Let's see what the second half brings.
 
My book does not approach adjustments from a Greek perspective... sorry :(. Natenberg or Cottle would be better for that :D

Quote from momoneythansens:

I still haven't read it yet (Sorry Phil), but I believe Mr.Budwick's book covers some of these concepts? Someone can confirm or deny. Not sure if it looks at it from a gamma scalping perspective though.

Agree, trading this concept as the position outright rather than as a hedge is a viable route!

The caveat is that this strategy works when it works and you need good directional skills to execute it :D

MoMoney.
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JUNE UPDATE:

I have been reviewing the number and it appears I may have been off in my calculation of my loss for JUNE after the adjustment.

Since I adjusted down and sold mre contracts I believe I offset the loss of adjusting partially and when combined with my JUNE calls profit, I actually have a NET PROFIT of about $1,000. :D

Remember that I took in profits on both the calls and puts (1140/1160) so the banked money allowed me to absorb the adjustment plus rolling from a 20 point spread to a 15 point spread allowed me to sell more puts to take in more premium. That is why, if you remember, I was moving to close my calls so that I would have the freedom to adjust my puts any way I wanted to without having margin handcuff me.

So all in all, not a bad month considering I adjusted.
 
Rally,

Did you look at my earlier post. I am at 32.4% YTD and you are 32.6. Pretty cool

Quote from rallymode:

June results.

ES 1355/1360 $1.75 credit expiring worthless

SPX 1235/1240 $1.2 closed at $.40

SPX 1235/1240 $1.5 credit closed at $1.5

June Profit: $2.55
June Return on Risk: 67%
June Max Port Risk: 5.6%

YTD Port Gain: 32.6%
Average Port Risk: 6%

Let's see what the second half brings.
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Quote from piccon:

Rally,

Did you look at my earlier post. I am at 32.4% YTD and you are 32.6. Pretty cool
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congrats. it's been a great market so far but i have my doubts about the rest of the year. I am slowly moving into higher r/r strats overall. Will do alot more premium buying than i did during the first half.
 
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