SPX Credit Spread Trader

[jeffm]

Quote from rdemyan:

I'd appreciate it if the guys using IB and trading SP, ES options could give me a quick explanation of which real-time quote "package" I should select.

The one you want is:
US Securities & Commodities Non-Professional Bundle (Includes all Stock, Options, Futures and Bond markets)

The price is $10/mo if you have less than $30 commish per month, and free otherwise.

You mentioned SP options. In the literal sense, SP options are options on the pit traded SP futures contract. Just avoid that mess altogether. ES (and other Globex products) are all you need to mess with.

 

[nlslax]

Quote from jeffm:

The one you want is:
US Securities & Commodities Non-Professional Bundle (Includes all Stock, Options, Futures and Bond markets)

Looks kinda expensive though if you have a securities license.

 

[rallymode]

Quote from rdemyan:

So I'm looking at signing up with IB in order to trade options on futures (eventually). I don't understand this rigamarole on paying for real-time quotes.

I'd appreciate it if the guys using IB and trading SP, ES options could give me a quick explanation of which real-time quote "package" I should select.

As I understand it, the cost will be $1.65 per contract. Can I get a better deal if I tell them that Mo or Coach sent me

ES options quotes fall within the non-professional us equities bundle which pretty much has all the electronically traded instruments you will need. I dont think you can do better than the price you mentioned. If you have any more specific questions about the platform, feel free to ask and i will see if i can answer them.

EDIT: i see someone already answered that one

 

[rdemyan]

Thanks, Jeff:

I just completed the application. Plan to paper trade for a while before I actually trade options on futures.

Quote from jeffm:

The one you want is:
US Securities & Commodities Non-Professional Bundle (Includes all Stock, Options, Futures and Bond markets)

The price is $10/mo if you have less than $30 commish per month, and free otherwise.

You mentioned SP options. In the literal sense, SP options are options on the pit traded SP futures contract. Just avoid that mess altogether. ES (and other Globex products) are all you need to mess with.

 

[rallymode]

Quote from Eric99:

I turned the system on its head by using Bollingers as a counter-trend indicator and the system made money in indices. I haven't tested a CTM spread program based on Bollingers yet, but intuitively, I expect it would work.

I have tested increasing size on rolls. I like this concept but you need sufficient discipline to trade small and leave lots of available cash to support larger positions. Two rolls and your margin is triple your initial position. This is your classic Martingale strategy, but if you have confidence in a counter-trend system, it would work nicely.

I like trading support/resistance type of setups on indices as I find index moves predictable moreso than individuals. Also for whatever reason, support/resistance levels tend to mean much more to indices than they mean to individuals in my opinion.

Yes, its pretty much a sell the rallies buy the dips kind of a system. Whether you decide to use bollinger bands, ma crossovers, stochs or simple highs and lows as your trigger, it all pretty much comes down to the same thing and that is can you call the direction right at or close to the right time LOL

As far as martingale, yes you have to start small and have some safe guards in place to keep you out of the painful breakouts that can blow you out. I am not a big advocate of size increase or roll up/down/outs but indices do tend to revert to the mean alot for whatever reason

 

[El OchoCinco]

Here is my secret tip for those of you using slow stochs.

If you have Tradestation, overlay the 10,15,20 and 25 period slow stoch on the same charting line so they overlap. Look for times when all 4 stochs are pinned high or low for reversals. Look at a daily or intraday chart over a long period of time and see how the multiple time-frame slow stochs work...

 

[rallymode]

Quote from optioncoach:

Here is my secret tip for those of you using slow stochs.

If you have Tradestation, overlay the 10,15,20 and 25 period slow stoch on the same charting line so they overlap. Look for times when all 4 stochs are pinned high or low for reversals. Look at a daily or intraday chart over a long period of time and see how the multiple time-frame slow stochs work...

didnt have you figured out for such a techie phil

 

[Prevail]

i'll try to post a tradestation report tomorrow. I don't use the model to trade as it is too correlated to my options model, I just know when it takes a sognal it is right 70 percent of the time. the entries need to be cleaned up but I haven't found the time.
.

Quote from scienter:

As Rally points out, would likely not suffer max loss on the entire 30%....most positions would be breakeven....IF managed correctly.

Could you share a bit of your countertrend system? Of course there are indicators of wanning strength....OB/OS indicators, newhighs/lows,volume spikes, ...when used together can tell a story....However have you come up with a simpler system like Rally? For example, I could see how keying in on the slow line of a stochastic that has reached/is nearing ob/os territory might work.... Thanks for your reply

 

[rallymode]

Alot of discussion lately on use of TA to call direction on the SPX. For those interested, I thought i'd post exactly what i am usually looking at when i place my SPX trades. Is it perfect? Certainly not, but is very manageable. I have personally placed a trade at each and every point i have outlined on that chart except maybe once in april or may. I even drew my next trade LOL

Looking at the chart one can argue why i didnt go long/short the futures instead and make a killing. Well, it just isnt my style. We are all good at our own things.

I consider other things when i open a trade not just TA but it certainly is an important part of my trading. Here it is:

Excuse my messy picture, apparently those drawing lessons i took in 3rd grade were a waste of my time, should have been studying stocks instead LOL

 

[Prevail]

Quote from optioncoach:

I do have vega exposure but it is not extreme since 1200 ATM puts will increase as well as my 1175 OTM Puts. At 1200 with IV back near 25 or so, I may not need to do anything at all. The position may be closed for a net credit perhaps or even locking in the gain or I let it go depending on time to expiration. With a week or so to expiration, I would not mind having it drop a little further to have the ES move into the lottery ticket zone.

I do not have the Greeks in front of my right now, but the jump in VIX to 26 or so will not hurt so much since I am long vega ATM plus more deltas initially. If time is short then theta and vega will battle and I will still pull a profit or even out.

The bad scenario is if it jumps past 1175 with a VIX spike. Then the juiced ATM short puts will be rich with premium and I would have to follow one of the adjustments I outlined.

I'm sure your smarter than me but my options software is saying something slightly different. I'm showing the ratio spread you mentioned (1200x1175) as being long .05 futures. If I look at the same ratio spread atm (1250x1225) then it is long .15 futures, at least with 31 calendar days left. Granted these numbers will improve as time passes.

Probably what is most perplexing to me is if everything remains constant and vols went to 26 the position would immediately lose $3500 (pit sp). While vega is less than a naked 1175, it appears to be substantial. Thoughts?

I'm actually looking at the 1225x1200 3x2 ratio spread for about even as I show the position is slightly short when laid on. The expiration break even is still down near yours and the max profit is large. Still, the vega exposure is similar to your 2x1.