SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Ok coach, how 'bout this...
A double touch barrier option into the Fed. I've noticed after the typical 25 bip hike(which I also think they'll do until kingdom come, btw), the markets initial knee jerk reaction tends to be the opposite of where the market wants to trade or follow through a day or two later.
This typical reaction would bode well for a double-touch, would it not?
R/A what do you think?
A double touch barrier option into the Fed. I've noticed after the typical 25 bip hike(which I also think they'll do until kingdom come, btw), the markets initial knee jerk reaction tends to be the opposite of where the market wants to trade or follow through a day or two later.
This typical reaction would bode well for a double-touch, would it not?
R/A what do you think?
Congratulations coach! John can help you predict market direction and VIX. You just have to know how to ask him. I hope you and your wife get enough sleep.
Quote from optioncoach:
John Sebastian.... 6 lbs 2 oz
....likes futures and options, just like his Dad
But also has no time or idea how to trade the Fed this week....
it is Sebastian, not SebaTHStian 
.
Little coach...
.Little coach...
Quote from riskarb:
Well, any hopes of hetero just went out the window... omfg, you know I am just kidding. Like the name; John Sebastian Optioncoach.
Many congrats.
ssuming you mean a few strike OTM eitehr side to win on the wild swing and pullback, I imagine you would pay $99 for $100 in risk reward since the probability is high of the swings..
Nope, it's really cheap, low prob, high reward. I found this on betonmarkets.
YOU wish to win USD100 if S&P500 Index touches *both* 1223 and 1261 in the period between now and 6-Jul-06 (inclusive).
The cost of this bet is USD16.77
The odds on this bet are EU:5.96 UK:104/21 US:496 (-20)
Your net profit is USD100-USD16.77 = USD83.22
which represents a +496% return on your USD16.77 investment.
I haven't backtested fed movement per se, but the 1261 target represents a 1.76% gain in spot and the 1223 target is a -1.31% loss. To me implied odds of winning seems 'cheap' to me.
YOU wish to win USD100 if S&P500 Index touches *both* 1223 and 1261 in the period between now and 6-Jul-06 (inclusive).
The cost of this bet is USD16.77
The odds on this bet are EU:5.96 UK:104/21 US:496 (-20)
Your net profit is USD100-USD16.77 = USD83.22
which represents a +496% return on your USD16.77 investment.
I haven't backtested fed movement per se, but the 1261 target represents a 1.76% gain in spot and the 1223 target is a -1.31% loss. To me implied odds of winning seems 'cheap' to me.
Congratulations, coach. I have six of them myself.
Right now I am in learning mode, as I stay on the sidelines. Ran across something very interesting, learning-wise.
OX has xspreads where traders can place spread orders on the book. And the orders stay there overnight.
Now, some of those traders know what they are doing, so it is very instructive to see what kind of spread trades are in the books.
For example, I placed an order for a calendar trade, a call calendar with a strike price in the money. The only one in the book. Then I saw almost a hundred put calendar spreads at that strike price.
Oops, a good chance at getting assigned, so I changed it. I can also see the bid prices (at least for OX).
A good place to check out ideas for positions.
Right now I am in learning mode, as I stay on the sidelines. Ran across something very interesting, learning-wise.
OX has xspreads where traders can place spread orders on the book. And the orders stay there overnight.
Now, some of those traders know what they are doing, so it is very instructive to see what kind of spread trades are in the books.
For example, I placed an order for a calendar trade, a call calendar with a strike price in the money. The only one in the book. Then I saw almost a hundred put calendar spreads at that strike price.
Oops, a good chance at getting assigned, so I changed it. I can also see the bid prices (at least for OX).
A good place to check out ideas for positions.
yeah...that's nice...a baroque fan, huh...
But what about this friggin market?! I'm lossin my a$$ out here!
Do you konw of any brokers that do these options. I understand you can outright sell them and the margin requirements are quite resonable.
augiedixit
augiedixit