SPX Credit Spread Trader

Quote from scoobie27:



In IB, there are a few selections to choose from when I type in ES in the UNDERLYING column. These selections come up...Stock, Index, Futures, FuturesOptions, Futures Spread, Options, Bond. Do I just select Index for the underlying, and for the the options I plan to trade, do I also select FuturesOptions. They are both Globex products with (USD) in brackets so Im guessing those are the ES products I;ll be trading?

Thanks :) :confused:
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For ES select Futures, for options select FutOpt.
 
If folks are looking at ratio spreads for volatility plays then the Christmas tree a.k.a ladder (2 by 1) is also an option worth considering:

Ratio spread is to Butterfly as
Christmas tree is to Condor

i.e. long PUT, short PUT, short PUT at consecutive strikes etc.

You sacrifice some of the "net credit" features of the "standard" ratio but other features of the spread compensate. You'll figure it out!

MoMoney.
 
Quote from momoneythansens:

If folks are looking at ratio spreads for volatility plays then the Christmas tree a.k.a ladder (2 by 1) is also an option worth considering:

Ratio spread is to Butterfly as
Christmas tree is to Condor

i.e. long PUT, short PUT, short PUT at consecutive strikes etc.

You sacrifice some of the "net credit" features of the "standard" ratio but other features of the spread compensate. You'll figure it out!

MoMoney.
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You better go double check that, mo's credibility is running thin today LOL
 
Quote from nlslax:

Been thinking the same thing. It's so clunky to get around.

I'm going to another TOS advanced class next week, guess I should familiarize myself with their systems.
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Sorry for late reply....in other side of the world asleep :p Yup I didnt realise how prehistoric OX was till I signed with IB.Its very agile but have to get used to it. TOS seems a little better than IB from what I read in this thread but Im with IB because it has ES options. They're having some webinars next month too and am looking forward to it. All new to me :) Willl still keep OX just in case im overseas on holiday or want to be a travelling world trader but then again IB has a web based version as well.
 
Quote from momoneythansens:

Futures -> Sep

Suggest use "Option Trader" for trading options. Again, Futures -> Sep and then "Load Chains" after filtering for desired strikes and expirations etc. Use the "?" top right for context sensitive help.

Good luck!

MoMoney.
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Thanks Mo, mm...I did notice " Option Trader" and I think its another platform or something like that. Anyway I'll play around with it and suss it out ready for trading tonight.

I thought you'd let out the Holy Grail and got my hopes up for about 15 mins about your earlier post but I knew it was too good to be true. :D Rydeman's gonna have to keep poking. Sooner or later you'lll let slip :p
 
Quote from Crucis:

If you think OX is bad, you should see Fidelity's Active Trader! Much worse.
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Never heard of that one before. Hasn't been discussed much here but two accounts is enough for me or i'll start losing track of me funds. But might have quick look at the website out of curiosity.
 
Quote from momoneythansens:

If folks are looking at ratio spreads for volatility plays then the Christmas tree a.k.a ladder (2 by 1) is also an option worth considering:

Ratio spread is to Butterfly as
Christmas tree is to Condor

i.e. long PUT, short PUT, short PUT at consecutive strikes etc.

You sacrifice some of the "net credit" features of the "standard" ratio but other features of the spread compensate. You'll figure it out!

MoMoney.
More...

I have written at length on this board about Christmas trees. It should be properly noted that the only reason one should trade ladders is to play the volatility skew. They really should not be used in accordance with iron condors. The two trades are very separate as are ratio spreads to butterflys. Yes, I understand they are in the same family. But with one you are betting on vols flattening across the board, on the other you are betting on the skew flattening.
 
Quote from scoobie27:

Never heard of that one before. Hasn't been discussed much here but two accounts is enough for me or i'll start losing track of me funds. But might have quick look at the website out of curiosity.
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Good point. As big as Fidelity is, it's a wonder why more traders dont use them. I checked with them a few years ago about doing spreads. At the time they used margin on both sides of a condor. I didn't look into them any further.
 
Thanks Coach and Rally,

I get what you guys are trying to say. I think Im being too simplistic. You're right, there's still profit even if ES ends up below the short strike at expiration. The thing is do I have the guts to hold it even when it just touches the short strike before expiration? Or to close the spread at some point and accepting a certain r/r (or win loss) ratio just like I would with credit spreads when the underlying is a certain distance from the short strike.

The conversion to butterflies is a good strategy. For example ES may start moving against me and I can buy the other side of the wing to complete the butterfly instead of OFFSETTING (new word I've learnt from this thread LOL) if I don't have the stomach to hold on. Just generalising, but if I do that I think I may have locked in a loss in this situation if theta has not had too much effect or Vols did not drop too much in the meantime (or heavens forbid Vols go up). But I still leave myself the lottery ticket should ES end between the first long strike and the short strike ( preferably at the short). Oops or even some distance below the short strike. Or I can maybe make the distance between the short strike and the new wing shorter, which brings up a new and i think positive scenario. Many possibilities..

Anyway im just regurgitating what most of you pros already know but I think im doing this just to help myself understand of the strategy better. It really does help one's understanding of the strategy when one posts his or her thoughts. Forgive me if its too general or if there's some mistakes. It now time for me do some serious looking at the risk profile graphs?


Quote from rallymode:

You better go double check that, mo's credibility is running thin today LOL
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I think this time its legit but will have a closer look. Mo's choice of words are slowly starting to resemble riskarbs :) I'll give Mo one get out of jail card cause he's done me plenty good in the past :D But its the last one you hear :D
 
Quote from andysmith:

More importantly, I hope Germany crushes Italy.

Germany 2 : Italy 1

France 2 : Portugal 0

France 1 : Germany 0 (in sudden death OT)
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Hey I didnt know you Yanks watch futbol :) Well now in hindsight Germany is gone. Wanted Italy to lose cause they beat the Socceroos :mad: in a bull&*%$ penalty in the last 10 seconds of the match! Which shouldn't have been a penalty :mad: but I won't bore you guys with the reasons.

Agree France to beat Portugal which I think they will but too chicken to put my money where my mouth is and France to beat Italy. Now that Socceroos are gone, Im going for the Frogs. Anyone heard of the socceroos :p Oh well doesn't matter.

Ok. Now back to credit spreads. Sorry Coach :D
 
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