SPX Credit Spread Trader

Quote from RichardRimes:

rd....well after tallying up total credits for the month so far I did decide to adjust my short call spread this am.

First shortly after opening I did sell 20 1235puts for 4.40 (on fri I bought 20 1220's for 2.85)..then I sold another put vertical 1200/1175 for a .70 credit (25 contracts) neither required any more buying power.

Just now I bought a 1295/1305/1315 B-Fly on 1/2 of my short position (25 contracts)...very interestingly I put a limit in of 1.70 debt and got filled within a few minutes for 1.30:eek: I probably am being too cautious but at least I've reduced my concern by half:p and I have a better balance of puts/calls.

edit: part of my reasoning is that I had expected more followthru today and when it didn't happen realized we might be just consolidating for a new move up.
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decided to fine tune my Aug position. 1st sold the above 1315 longs (that had been part of my B-fly roll) got 2.25 (had paid 1.9) I now have an order for a slightly pg B-fly for the balance of the short 1295's. You can follow it on TOS's thinkspreads...mark is .30-.40 and I'm offering .95:eek:(debt) ...very interesting. If I don't get it then I think its a real "tell" the MM's do believe the market will take a dive after the Fed.

up to .65....may be their working on it
 
Coach
Its 8 months since i started credit spreads and i have learnt a lot from you and others here.Now i am feeling, i have a lot of time on my hands. I cant really express these feelings, maybe i need another challenge.
Anyways, i am thinking of futures and i understand its a whole new ball game, involving lot more risk. I am thinking of a strategy for that. i buy a front month ES call and put and then keep them aside. I go about day trading according to my rules and stop losses. Going LONG one day and going SHORT one day according to the TA. If,for some reason i am not able to follow my rules and end up making a mess of my account, i exercise my options.
Its like buying wholesale and selling retail.
Really appreciate if you can share some of your futures insights.thanks
 
Quote from Heatheranderson:

I am thinking of a strategy for that. i buy a front month ES call and put and then keep them aside. I go about day trading according to my rules and stop losses. Going LONG one day and going SHORT one day according to the TA.
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Gamma scalping. Your losses are limited to the price you paid for the straddle, given you buy ATM. Your goal would be to flip the futs fast/well enough to offset any time decay. In my opinion it is a strategy that requires alot of finess to make it positive expectancy over the long haul. Alot of reading on it around here and mav has a nice detailed explanation on his firm's site that mo posted not too long ago.

On a side note. Opened SEP ES 1330/1335 bear call spread for $1.25. Given that this is my 666'th post perhaps i should've kept this quiet. :eek:
 
That's sort of FOTM for you isn't it. Also, from your previous postings, I would have expected that you would wait until after the FOMC meeting.

Care to share your strategy on this one?

Quote from rallymode:


On a side note. Opened SEP ES 1330/1335 bear call spread for $1.25. Given that this is my 666'th post perhaps i should've kept this quiet. :eek: [/B]
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Quote from rallymode:

Gamma scalping. Your losses are limite

On a side note. Opened SEP ES 1330/1335 bear call spread for $1.25. Given that this is my 666'th post perhaps i should've kept this quiet. :eek:
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:D I'll give you a chance for another post....quick...how about a chart? You obviously think we are overbought here?
thx
 
Quote from rdemyan:



Care to share your strategy on this one?
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yes. bigger balls. broke a few rules on this one. every now and then i stray from the road. complecency, i suppose. :D

on a side note, i think it will be mighty hard to break the may highs even if the fed pauses and/or the market reacts positively.

Also, being FOTM isnt bad, notice i am still at around 1:2.5 r/r.
 
Quote from RichardRimes:

quick...how about a chart?
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spxww5.jpg
 
Quote from Heatheranderson:


Anyways, i am thinking of futures and i understand its a whole new ball game, involving lot more risk. I am thinking of a strategy for that. i buy a front month ES call and put and then keep them aside. I go about day trading according to my rules and stop losses. Going LONG one day and going SHORT one day according to the TA. If,for some reason i am not able to follow my rules and end up making a mess of my account, i exercise my options.
Its like buying wholesale and selling retail.
Really appreciate if you can share some of your futures insights.thanks
More...

It doesn't sound like you intend to gamma scalp systematically. Rather, day trade discretionary with long straddle as "backup". There are some flaws to your plan.

Have a look at this old journal. Suggest read all of it right to the end for some possible insights:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=34148

FWIW, suggest learning to daytrade individual issues before moving to E-minis. Depending on your personality boredom can make for bad decision making :D

Good luck :)

MoMoney.
 
thanks Rally...thats what I figured and FWIW I agree with you...this bull in tired...no matter what the Fed does the bears will whine and see it as a reason to sell (thats my gut talking). August is not a month that usually is a high and we haven't see an Aug set 55pts higher than a July set. (off the top of my head) in the past 8yrs)checking july 02.. 864/aug 02.. 923 but most are flat to down.

edit...and if painful memory serves July 02 was close to the bottem of the bear market...so there was a kinda "relief" rally overdue in aug
 
Anyone uses ever-touch probability in credit spread strategy?

If we can estimate the probability that the index moves to our adjustment point, we can estimate how often we adjust our position.

Want to get some insight here on the use of ever-touch probability. McMillan thinks it is very useful in option trading.
 
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