SPX Credit Spread Trader

I kind of became a self-sufficient trader. I use Tradestation charts, my own technical analysis combinations, listen to free medai (CNBC/Bloomberg/MarketWatch) and apply my own experience.

Just as vital, are the discussions and shared analysis I find here at ET on this thread. Open discussions lets you learn from others and see how they see the market. Your ability to agree or disagree with the viewpoints expressed help shape your own viewpoint and make you a better trader.
 
Quote from RichardRimes:

I've mentioned before I find Helene Meislers take on the 10 day oscillators and other charts (Realmoney.com) useful in timing
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I would like to add that LEARNING about options what helped me the most was optiontradingcoach and optionclub on yahoo because that helped me to find the tools...books, broker without which I could never have achieved success. ET has helped as coach says to sharing/comparing thoughts and idea
 
Quote from volatilitypimp:

you are not forced to take on any overnight margin. That is only $$ over and above your equity in the position that gets charged the interest.

Most that trade there are 'upstairs market makers' for lack of a better word. They trade pure arbitrage.

If the synthetic is offered 10 cents over stock, buy the combo, sell the stock. Or the box-jelly roll is nickel bid in Phlx offered 15 cents over on ISE, sell the ICe, buy Phlx, stuff like that.

Since these are considered lock positions, there is no overnight margin to contend with. Nickel and dime the market is what this is all about. Or what the owner likes to say, "Get the edge, then hedge".:)
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Arbitrage in the options markets is a limited game. The U.S. options markets are among the first in the world to try to figure out how to eliminate arbitage, and therefore this form of price competition between them. All U.S. options exchanges trade the same options and all these options are fungible between exchanges. And, there's pprobably not a single academic paper which describes arbitrage as unhealthy. So arbitrageurs, with those lightning fills at the click of the mouse button rule the roost, right? Not so fast. The exchanges turned off the instant fills in arbitrage situations, and promised a "manual" fill in the pit. Only the fills never come, and the orders are merely discarded! All you guys at a national exchange should take a lesson, and copy what has been done here. Competition can be eliminated, even if it might be illegal to do so. Not filling disseminated quotes is against the SEC Firm Quote Rule, but you may forget, all these exchanges are Self-Regulatory Organizations (SRO's as they are called). Option-floor based SRO's do not list violations for price-fading to traders, even though these fades have flown like water through a fire house for at least 5 years! The SEC has also been managed out of existance. The SEC certainly knows about these issues (SEC report below), but the SEC now meets, and talks with the exchanges, arbitrageurs need not apply! Period. End of story.

There is a lawsuit about this called Last Atlantis Capital v. Chicago Board Options Exchange (CBOE), or something similar, but part of it's been thrown out. How to profit? Become a remote market-maker. It's becoming easier (and maybe cheaper). You can trade from your home. All option exchanges now have these programs. It's much easier being the "house". You can also bust trades you don't like, after you've actually traded them. In today's environment you've gotta go with being the "house", especially when you can move your regulator to the sidelines.

http://www.thememoryhole.org/corp/finance/sec_amex_report.htm
 
Quote from burrben:

Well it's probably not a issue, so the main sources I use are:
RedOption commentary
TimeFrameInvestor.com
TheKirkReport
and the EliteTrader board.

Anyone else like to share?

burr...
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with so many traders/investors having the "information edge" nowadays as opposed to traders of say the nineties and before, has anyone concluded that perhaps we are going to see tighter (spx) markets (rangebound) for many years to come? [not including black swan event]
 
Quote from wilburbear:

Arbitrage in the options markets is a limited game. The U.S. options markets are among the first in the world to try to figure out how to eliminate arbitage, and therefore this form of price competition between them. All U.S. options exchanges trade the same options and all these options are fungible between exchanges. And, there's pprobably not a single academic paper which describes arbitrage as unhealthy. So arbitrageurs, with those lightning fills at the click of the mouse button rule the roost, right? Not so fast. The exchanges turned off the instant fills in arbitrage situations, and promised a "manual" fill in the pit. Only the fills never come, and the orders are merely discarded! All you guys at a national exchange should take a lesson, and copy what has been done here. Competition can be eliminated, even if it might be illegal to do so. Not filling disseminated quotes is against the SEC Firm Quote Rule, but you may forget, all these exchanges are Self-Regulatory Organizations (SRO's as they are called). Option-floor based SRO's do not list violations for price-fading to traders, even though these fades have flown like water through a fire house for at least 5 years! The SEC has also been managed out of existance. The SEC certainly knows about these issues (SEC report below), but the SEC now meets, and talks with the exchanges, arbitrageurs need not apply! Period. End of story.

There is a lawsuit about this called Last Atlantis Capital v. Chicago Board Options Exchange (CBOE), or something similar, but part of it's been thrown out. How to profit? Become a remote market-maker. It's becoming easier (and maybe cheaper). You can trade from your home. All option exchanges now have these programs. It's much easier being the "house". You can also bust trades you don't like, after you've actually traded them. In today's environment you've gotta go with being the "house", especially when you can move your regulator to the sidelines.

http://www.thememoryhole.org/corp/finance/sec_amex_report.htm
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The irony of the whole situation lies in the fact that the SEC unintentionally created the current market regime which allows and encourages the proliferation of many of these "upstairs" shops vis-a-vis payments for order flow. Which is discussed at length here:

http://www.law.harvard.edu/faculty/...1.pdf#search="payment for order flow harvard"

and here:

http://www.law.harvard.edu/faculty/...orderflow.pdf#search="payment for order flow"

The bottom line is arbitrageurs have to put a roof over their families heads and food on their plates just like every body else. The exchanges don't like it, but that's what happens with increased regulation and pressure for price improvement mechanisms that were put into place.
 
Has anybody heard about new pending CBOE rules requiring double margin for Iron Condors???

I heard OX will soon be requiring margin for both legs of an Iron Condor, not just one. They are issuing margin calls, however not enforcing yet.

So if you had funds in your account to cover your spreads, extra funds would be locked, up to the double margin requirement. :mad:
 
Quote from rsflint:

Has anybody heard about new pending CBOE rules requiring double margin for Iron Condors???

I heard OX will soon be requiring margin for both legs of an Iron Condor, not just one. They are issuing margin calls, however not enforcing yet.

So if you had funds in your account to cover your spreads, extra funds would be locked, up to the double margin requirement. :mad:
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Not sure I understand, how would CBOE know if I have an Iron Condor or not? My broker would, but CBOE wouldn't know which account holds what contracts would they?
 
Quote from ryank:

Not sure I understand, how would CBOE know if I have an Iron Condor or not? My broker would, but CBOE wouldn't know which account holds what contracts would they?
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not saying that CBOE would know, just that they are regulating the brokers, and yes agreed-- your broker would know, not CBOE.
 
Where did you hear this?

Quote from rsflint:

not saying that CBOE would know, just that they are regulating the brokers, and yes agreed-- your broker would know, not CBOE.
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