SPX Credit Spread Trader

apex82 · Jul 17, 2006

Flint you are set for august... you might as well go on vacation. You may want to look at some cheap spy calls to hedge your bear call though while we lurk around these lows.

rdemyan · Jul 17, 2006

rsflint:

Do you have the 1300/1310 or the 1300/1320. I was trying to get into the 1300/1310 today for a buck and couldn't get it. But I wouldn't relent because I swore I saw that you had posted that you had gotten a $1.00. Is that ridiculous or what on my part. It seems like trading options is half a mental battle with oneself. LOL. Good luck with your positions.

Quote from rsflint:

Got into an 1155/1165 Bullish Put Spread today for $0.90.

Here's my updated August Positions:

1300/1320 Bearish Call Spread for $1.00
1155/1165 Bullish Pub Spread for $0.90
Total Credit = $1.90

Hopefully things won't go too insane in the middle east and support levels 1220, 1200, and 1168 will all hold.

I'll be watching the market..may need to look into some SPY hedges.

rsflint · Jul 18, 2006

Quote from rdemyan:

rsflint:

Do you have the 1300/1310 or the 1300/1320. I was trying to get into the 1300/1310 today for a buck and couldn't get it. But I wouldn't relent because I swore I saw that you had posted that you had gotten a $1.00. Is that ridiculous or what on my part. It seems like trading options is half a mental battle with oneself. LOL. Good luck with your positions.

I have the 1300/1310 bearish call spreads...for some reason my finger keeps slipping to the 2 instead of 1 key LOL

Yes I got $1.00 late last week...and yes I agree sometimes the moneymakers just wont let us get what we want!

rsflint · Jul 18, 2006

Quote from apex82:

Flint you are set for august... you might as well go on vacation. You may want to look at some cheap spy calls to hedge your bear call though while we lurk around these lows.

Apex82 - thanks...well I'm supposed to go on a business trip in August does this count?

Thanks for the hedge suggestions..I'll take a look at some of those.

rdemyan · Jul 18, 2006

Did those of you with ToS notice that they made some improvements to the web-based trading. It's getting closer to the functionality of the desk-top system.

I'm playing around with it and it looks like I can enter in credit spread orders with the web-based system about as easily as with the desktop system.

Here's what the e-mail they sent me says:

The only thing that can rival the TOS trading platform is another TOS trading platform. With our Web Based Trading (WBT) platform now built with AJAX technology, you'll start to see some of the features you love on the downloaded platform start to appear on WBT. We released the latest version of WBT last Thursday, the 13th, at 6:00 pm. Here are some of the new features you'll see.

TOS Charts are now included with all the tools and studies available on the software. You can even see multiple charts at once, but be aware that it runs via a Java applet, so looking at too many charts at once could slow down your machine!
The mid price/natural price slide indicator has been added to the order entry bar, as well as a "Details" button that lets you see information on your order such as buying power effect, max profit, loss and commission cost. You can keep that window open to see how the values change when you edit the order.
You can now enter all the spread types on WBT that you can on the software. Click the blue arrow next to the bid or ask price to see the different spread types and create the order.
The Order Book now displays execution messages faster.
Option spread orders now have a debit/credit indicator next to the limit price.
If you have multiple accounts, you can change the account in which you're placing the order in the Order Confirmation box.
Both the Quotes and Quick Quotes page have been updated to indicate more clearly which favorites list you're currently viewing.

Hope you enjoy these improvements! Look for more real soon.

rsflint · Jul 18, 2006

rydeman, Is the main reason you are with TOS is due to better fills?? If it's straight-forward like OX which I currently use, I may be interested to switch.

rdemyan · Jul 18, 2006

We've had quite a few discussions of ToS versus OX and IB on this thread. I think I can say that, of those of us who've tried both, most feel that ToS is better, especially the desktop software. Before, OX had a better web-based platform, but I suspect that is no longer true. With the new ToS web-based system, I can easily select the strikes (none of the symbols that you have to search for on OX).

I have both ToS and OX. With ToS I can call the trading desk and get them to call the SPX pit to find out what the market makers really want. Many times after calling the trading desk I get filled or they suggest giving another nickel or so to get filled. In this regard, OX is not even close, IMHO.

If you decide to switch, mention either Coach Phil or TheOptionClub.com to get commissions of $1.25 per option contract (I believe there is no minimum, but I never trade less than 10 contracts so I'm not sure). To my knowledge, ToS does not charge extra for phone trades or to call them to get them to call the pit.

Now if they would just add options on futures, I, personally, wouldn't even consider another brokerage.

EDIT: And the analysis tools I'm told are awesome, but I must confess, I hardly ever use them, because I haven't taken the time to read the help files

Maybe others can comment on that aspect of ToS.

EDIT#2: One other thing. The desktop version (I'm not sure about the web-based version) has a play money area. All of the ToS functionality is there except that it's play money. So you place a simulated trade, test out new strategies, etc just like you would for real and you can see what happens to it over the course of days, weeks or whatever. The only issue with it that I'm aware of is that in the "play" area you get filled at the midpoint. There is no giving up a nickel, dime, etc to the MMs like there is in the real world.

Quote from rsflint:

rydeman, Is the main reason you are with TOS is due to better fills?? If it's straight-forward like OX which I currently use, I may be interested to switch.

ChrisM · Jul 18, 2006

Quote from yip1997:

I have been using only naked write in the past. Because of the margin requirement, I didn't get a good return of my money. It seems that if i modify my strategy to add a long leg to make it a credit spread, I can have a better leverage. Am I right on this point?

Thank you all for making this forum one of the best in ET.

ES naked options margin requirements are significantly lower vs. SPX/

ryank · Jul 18, 2006

Quote from rdemyan:

There was a period where I was sure you'd, at least mentally, gone over to the CTM side.

If you don't mind sharing, how has your strategy evolved. I saw that you're trying a put diagonal. Have you actually placed any CTM trades yet?

EDIT: I'm liking the 45/15 or 45/0 day strategy as well. Call premiums fade quickly. But in this case I just couldn't pass up taking 80% of the August spread credit in about a week. Doesn't happen too often.

With the CTM spreads and diagonals I am adding more tools to my tool box.

I really like the CTM spreads but haven't put one on yet. I was all set to do it Friday and was monitoring 2 different put spreads but I had to be away from my desk for a few hours and missed the opportunity. I will be doing CTM as the opportunity presents itself. The risk/reward is pretty good and I like the way the spread reacts to adverse moves compared to FOTM spreads. From my paper trades and observations there is less risk than FOTM and similar credits (using less margin) if managed right.

The diagonals are interesting in that you want the market to move towards your short as this increases your profit. There are also many ways to hedge/adjust them and still have a good profit (depending on IV). The downside of the put diagonal is you have a debit not a credit to open the position, still trying to get used to that concept

. The diagonals do use a fair amount of margin but the r/r and adjustments are decent.

I'm still doing FOTM spreads, been doing them for too long now to let go

. What I am doing is allocating less margin to them to allow me to do the CTM and diagonals.

trentfx · Jul 18, 2006

rdemyan,
Thanks for the heads up mentioning Coach Phil - this thread is what got me to sign up with ToS but I must have missed the $1.25 commissions at some point. Hopefully they will still honor it.

The analysis tools are very good - I do use them and from what I can tell, they are comparable to many fee-based programs (i.e. optionvue). It is very easy to calculate 1 sigmas probability of expiring as well as probability of touching. Nice feature.

JT

Quote from rdemyan:

If you decide to switch, mention either Coach Phil or TheOptionClub.com to get commissions of $1.25 per option contract

EDIT: And the analysis tools I'm told are awesome, but I must confess, I hardly ever use them, because I haven't taken the time to read the help files Maybe others can comment on that aspect of ToS.