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SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Im sure you'll pick it up if you read it.DJX closing 113.86
NDX closing 1574.70
SPX ?
NDX closing 1574.70
SPX ?
Quote from momoneythansens:
Unfortunately, when the underyling is at your short strike, it will most likely not be on the high volatility that is optimal for selling the calendar/rolling. This is the problem inherent in CALL calendars and CALL diagonals.
Let me think about this. The implication is that when you open a calendar, it would be better, all things equal, to open it slightly above the market. If market goes up, you benefit fr gamma, if down, from volty.
Does that make sense?
>Thanks for the risk profile and you're probably correct. Its probably due to the fact that the distance between my short strikes is 125 pts.
My take on it.
The double diag, unlike the IC, does not like FOTM since you want the market to approach one short or the other. And =not= in the middle, between the strikes.
My take on it.
The double diag, unlike the IC, does not like FOTM since you want the market to approach one short or the other. And =not= in the middle, between the strikes.
Quote from cdowis:
>Thanks for the risk profile and you're probably correct. Its probably due to the fact that the distance between my short strikes is 125 pts.
When you pay a DEBIT for the double diagonal, it's important that you have a good chance to sell out your longs for enough cash to compenstae for that debit.
Suggestions:
a) If trading FOTM, find strikes that allow you to obtain a cash credit when opening the position.
or
b) Move your short strikes closer. Yes, that increases the possibility of being forced to adjust, but it also gives you a better chance to earn a profit from the trade.
Mark
Sailing,
Can you share your diagonal trades for sept. I want to follow them to see how they work. I want to paper trade this month.
Can you share your diagonal trades for sept. I want to follow them to see how they work. I want to paper trade this month.
Quote from Sailing:
No one knows... that's the beauty of trading. So.. instead trade your GREEKs, rather than the charts.
As Maverick once told me.... your risk, capital, margin, ... they do not understand support and resistance. Your risk is what it is at this moment in time...
So... trade the greeks according to your trading plan, not the graphs.
IOW, do you want to be long VEGA, long GAMMA, short DELTA.
Trading has become much more profitable since I began trading GREEKs rather than positions.
M~
PS... We're LONG vega... in a big way going forward. Multiple put diagonals placed today.....