I trade with IB. I put in for $0.7 and got $0.8.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
The short answer is to never put yourself in a position to even deal with early assignment.
For SPX, they are European style so no worries there on early assignment.
For ES credit spreads, I do not wait for the short strike to go ITM to avoid that issue. If the market runs past my short strike unexpectedly, the short options might still have good time value premium so early exercise is a rare occurence. If it does happen for whatever rare reason, I will most likely be helped out since I am out of the short strike at no time value premium and cansell the futures and liquidate the long position as well.
For put ratio spreads, early assignment is a blessing in disguise.
which allows me to get out of the position without paying time value premium to buy back the shorts.
For SPX, they are European style so no worries there on early assignment.
For ES credit spreads, I do not wait for the short strike to go ITM to avoid that issue. If the market runs past my short strike unexpectedly, the short options might still have good time value premium so early exercise is a rare occurence. If it does happen for whatever rare reason, I will most likely be helped out since I am out of the short strike at no time value premium and cansell the futures and liquidate the long position as well.
For put ratio spreads, early assignment is a blessing in disguise.
which allows me to get out of the position without paying time value premium to buy back the shorts.Trade with what makes you comfortable. It is a risk/reward trade off. calls feel safer because markets rise in a more steady pace than they crash but the skew makes the premiums smaller requiring you to go a little closer to the money.
Puts have nice skews allowing you to go really far OTM but markets crash faster and IV ramps up.
Just have to weigh the factors of each and go with what you fee more confident trading.
1340 is as low as you want to go really because it is outside recent 8 month highs which is around 1325. Any lower and you might get shaken out of your position if we retest highs in the next 6 weeks or so.
Puts have nice skews allowing you to go really far OTM but markets crash faster and IV ramps up.
Just have to weigh the factors of each and go with what you fee more confident trading.
1340 is as low as you want to go really because it is outside recent 8 month highs which is around 1325. Any lower and you might get shaken out of your position if we retest highs in the next 6 weeks or so.
So far it looks like I timed my ES put ratio spread entry very well as moving average rsistance held yesterday and we are up today. Should be sideways to up hopefully unless job reports is way off base in either direction.
IMHO, for SPX spreads, that thing is junk. It works purely off assumptions of where fills might occur mid vs. nat. It's nothing like the TPC. I would love to see the TPC functionality solved for price rather than value.
I got a 34 contract fill at AUG 1345/1355 for .60 @ 11:25:49 EDT, but I had to chat with TOS to get them to check with the floor broker. Bid was .50, but it filled about 20 seconds later as it did for others at TOS.