SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Murray:
Spoan margin could just be a prettier blade to cut you with. My advice is to never open credit spreads or diagonals who max risk is greater than your account balance and then it really will not matter SPAN v. Reg. T and that might be the best policy for those IRA accounts. However for diagonals, ES rocks due to ES and EW choices and better fills per b/a spread compared to SPX.
I take advantage of SPAN and the haircut for the ratio spreads but I can roll it into a bear put spread or butterfly for a limited risk position even if doing so takes a nice loss (like rolling SPX credit spread into Prego Fly). SO I know that even if the position gets away from my, I still have chocies to lock it down without blowing up.
For IRAs follow my rule above and it is not an issue. But you will find the ES spreads might work better and provide more flexibility
Spoan margin could just be a prettier blade to cut you with. My advice is to never open credit spreads or diagonals who max risk is greater than your account balance and then it really will not matter SPAN v. Reg. T and that might be the best policy for those IRA accounts. However for diagonals, ES rocks due to ES and EW choices and better fills per b/a spread compared to SPX.
I take advantage of SPAN and the haircut for the ratio spreads but I can roll it into a bear put spread or butterfly for a limited risk position even if doing so takes a nice loss (like rolling SPX credit spread into Prego Fly). SO I know that even if the position gets away from my, I still have chocies to lock it down without blowing up.
For IRAs follow my rule above and it is not an issue. But you will find the ES spreads might work better and provide more flexibility
Coach,
As far as selling back month Premium against short term Month, is you are playing VEGA as you suggested, but you have a much longer time frame to be right in the trade, unlike month tomonth credit spreads. If you look at a chart of the VIX, history shows that most increases in VIX last for very short periods of time. Usually measured in days, not months. Therefore, a DEC, premium decay position gives you plenty of exit points. Remember, only a slight decrease in VEGA wildly effects the DEC back month position. Check out the intra-month spikes, ie yesterday.
http://www.ivolatility.com/options.j?ticker=SPX:&R=1&period=3&chart=02&vct=4
Phil,
Our thoughts were to move IRA's to SPAN margin, and Cash accounts to 'Haircut'. With the haircut margin we could still trade cash index options.... volume and liquidity advantages?
Your thoughts? Thanks.
M~
Our thoughts were to move IRA's to SPAN margin, and Cash accounts to 'Haircut'. With the haircut margin we could still trade cash index options.... volume and liquidity advantages?
Your thoughts? Thanks.
M~
Quote from optioncoach:
Murray:
Spoan margin could just be a prettier blade to cut you with. My advice is to never open credit spreads or diagonals who max risk is greater than your account balance and then it really will not matter SPAN v. Reg. T and that might be the best policy for those IRA accounts. However for diagonals, ES rocks due to ES and EW choices and better fills per b/a spread compared to SPX.
I take advantage of SPAN and the haircut for the ratio spreads but I can roll it into a bear put spread or butterfly for a limited risk position even if doing so takes a nice loss (like rolling SPX credit spread into Prego Fly). SO I know that even if the position gets away from my, I still have chocies to lock it down without blowing up.
For IRAs follow my rule above and it is not an issue. But you will find the ES spreads might work better and provide more flexibility
I follow you. I just need some downtime to actually look at a position and see what the credit would be to roll the AUG to OCT or DEC for the reverse calendar and the potential. Reverse calendars are new for me so have to study a little.
Possible accounting nightmare?
IB has book management within the advisors accounts. V-trader would be one single entity and a ton of book keeping.... but I guess outside third party software is available....
Have you gone through this decision process when dealing with your 'other' account managements?
M~
IB has book management within the advisors accounts. V-trader would be one single entity and a ton of book keeping.... but I guess outside third party software is available....
Have you gone through this decision process when dealing with your 'other' account managements?
M~
Quote from Sailing:
The call diagonal spread actually was not placed as a credit spread. Sold July 1305c - $6.20 Bought August 1225c - $6.80 were the original fills, debit of .60
Yup I just price a 1310/1330 Aug Sep diag and the debit is around 0.55 mid but with my lousy/newby legging skills with IB i'll probably end up paying 0.80 and i'll really be behing the black ball to start with
The July/Auguest call diagonal prior to the move yesterday was still profitable (about 1%), currently now with the 1305 July call expiring worthless, the Aug 1325c is about .80. Small profit, but lot of upside profit potential.... if we had another upday follow through.
I assume that's 1% of margin, and not initial debit, which is still good.
Adjustment Ideas with the Aug 1325c:
1. We could sell the 1315 against it for an August credit spread and onlyl having to fight the b/a spread once. Essentially the Aug 1325c would be literally free to sell against... actually a .20 c redit as of now. The 1315s are now selling for $1.15 That's not a bad return: $1.15 on a .20 credit.
2. Sell a DEC 1300c and play a delta movement to the downside. Vega would probably increase.... but a bleeding of the VIX would help protect you should the market move higher. Current DEC 1300c - $30.70 (A partial MAVERICK X-mas Tree)
3. Close out position and replace for Aug/Sept.
4. Place an unbalanced Aug Call Butterfly.
Whew :eek: Looks like no sleep for me tonight.
M~ [/B]
Thanks Murray
Just want to say I have yet to find a strike I have been intreested in with so litlte action that I do not get filled shaving a tick off the bid or ask for ES.
I think you can divide it like you are saying with IRAs at IB and cash accounts at VT. Just sweep profits regularly unless you really need the capital account buildup to trade bigger. I still have my ToS account where the prop money came from and if I want to sweep money but do not need it in my hands at the moment I am going to sweep it to ToS for safe-keeping .
.