SPX Credit Spread Trader

Quote from yip1997:

I expect IV is larger than HV in normal market environment. Recently I found that IV is lower than HV. Under what conditions does it happen? How does it affect our trading strategies?
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The condition we just had starting just before May expiration: Rapid IV expansion followed by contraction. It takes HV a while to catch up (or down).

Generally, it's a time of caution for spread traders as the market may not be fully settled into its new "routine". You're going to get less premium for the same time and distance. This isn't reassuring after the market has been a little nutty during its high IV period.
 
Quote from RichardRimes:

Yip it took me 6 months before I began to be comfortable using it:( But then I'm a slow learner:p However I'm totally spoiled to anything else now...it is unfreakingbelievable...

and given the average age...err...IQ of the ET'er Heather will have to change her alias to Howardanderson:)
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I'm learning ToS by papertrading the account. I really miss the journal capability from OX. The scratchpad just isn't the same.

Cru
 
Been using the analysis tab for a couple of weeks -- can't live without it.
For example,

"add simulated trades", select sep 65 put, buy, calendar.

The sep/oct calendar spread automatically pops down the page. change oct to dec. the spread mark price shows, as well as the margin (bp effect).

click on risk profile, and there it is.

Decide to see what it looks like if I do a 69 put calendar, so I add it. Now, by checking both positions I can see how they interact (tent poles), or check each one separately to see which one looks best.

You can look at the position by changing volitality, or time intervals.

I then click on "duplicate order" on the one I like best, and it sends it to the order tab where I can then send the order.

Amazing tool.

I also use it to monitor my position after placing it. I can watch as it goes outside the break-even lines, and decide whether to close it out as I move the cursor away from the position.
 
You can do better using the Analyze TAB this way,

Try going to the 'single' pull down column above the option quotes when you add a trade.

Then select 'deep & wide by 2 strikes" for example, then slide right to say vertical.

You now have a list of vertical spreads by 2 strikes quoted by mark price. Click on buy or sell the spread as appropriate.

You'll like this feature way better than individual analysis.

You can then enter a ton of them and analyze away....

Calenars
Diagonals
Double Diagonals...

etc


M~
 
Quote from Sailing:

You can do better using the Analyze TAB this way,

Try going to the 'single' pull down column above the option quotes when you add a trade.

Then select 'deep & wide by 2 strikes" for example, then slide right to say vertical.

You now have a list of vertical spreads by 2 strikes quoted by mark price. Click on buy or sell the spread as appropriate.

You'll like this feature way better than individual analysis.

M~
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Could you explain this a bit more? Where do you get the 'deep & wide by 2 strikes'? How about a step by step example?

Thanks, Cru :confused:
 
DIAGONAL POSITION UPDATE


Sold 135 AUG EW 1315 Calls @ Average Price of 1.83
Credit = ~ $12,402.50

Bought 150 SEP ES 1335 Calls @ 1.45
Debit = $10,875

INITIAL NET CREDIT = $1,527.50

Eventually added extra 15 AUG EW Calls @ 4.00 for additional credit of $3,000.

NEW NET CREDIT = $4,527.50


-----> ES has been in a wonderful sideways pattern around 1300 or so. If it can keep it up for a few mroe days, my EW 1315 calls can expire worthless and I can take some significant profits on the SEP ES 1335 calls (currently at 1.20 and with 150 contracts, a value of $9,000).
 
Thank you all for the wonderful tips.

This software is amazing. If I had TOS account opened months ago, It would have saved my time in understanding and programming option pricing models. :mad:

With everyone using TOS, my edge is done?:confused:
 
Quote from Crucis:

Could you explain this a bit more? Where do you get the 'deep & wide by 2 strikes'? How about a step by step example?

Thanks, Cru :confused:
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When you click on Single as Sailing described it is the last choice at the bottom of the pull down box. Hover your cursor over it and a new box pops up to the right where you have many different month and strike combinations, then you can choose vertical, diagonal, etc.
 
Quote from ryank:

When you click on Single as Sailing described it is the last choice at the bottom of the pull down box. Hover your cursor over it and a new box pops up to the right where you have many different month and strike combinations, then you can choose vertical, diagonal, etc.
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Thank you! I didn't notice the bottom of the list. :eek:
 
Clilck on Analyze Tab
Click on Add Simulated Trades
To the right of the word OPTIONs, you will see 'single', click on that
Scroll down to 'Deep and Wide' (very bottom of pull down menu)
Then slide right to "1month x 2 strike", and then continue sliding right to 'vertical'

Now click on the blue arrow in front of the work OPTIONs. This is the extended options. You will now see selected strikes for Sept.

If you would like to see them all, go to "strike quantity" in the upper right hand corner... select 'all'.

That's it

M~


Quote from Crucis:

Could you explain this a bit more? Where do you get the 'deep & wide by 2 strikes'? How about a step by step example?

Thanks, Cru :confused:
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