Ahhhhh....
$.05 credit is not worth the commission and taxes so not sure how he profited unless he loaded up.
beginner
Sort of speaks for itself there...
Too lucky to know how wrong he really was....
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Ahhhhh....
$.05 credit is not worth the commission and taxes so not sure how he profited unless he loaded up.
Sort of speaks for itself there...
Too lucky to know how wrong he really was....
Coach
What about buying premium(long straddle) on spx 1 hour before close for $0.10 and look for SET for a lottery payoff?.
What about buying premium(long straddle) on spx 1 hour before close for $0.10 and look for SET for a lottery payoff?.
Hey guys..specifically Sailing,
So, I've been watching all of your DD plays, still trying to evaluate this compared to verticals.
Tell m if I'm wrong. Using puts as an example, If you use DDs to play the vega, then when the short represents like 66% of the long then you need significant movement up to lose, and since you would have only gotten in during low vega, the loss of vega wouldnt hurt too much. However, if it moves down, you not only get the drop in underlying price in your favor, but also an incr. in vega all of which makes you money. And while theta is always a good thing to help add to profit, as soon as the increase in vega makes a good profit for you, you should close out and enjoy your money. Do I have the general idea?
So, I've been watching all of your DD plays, still trying to evaluate this compared to verticals.
Tell m if I'm wrong. Using puts as an example, If you use DDs to play the vega, then when the short represents like 66% of the long then you need significant movement up to lose, and since you would have only gotten in during low vega, the loss of vega wouldnt hurt too much. However, if it moves down, you not only get the drop in underlying price in your favor, but also an incr. in vega all of which makes you money. And while theta is always a good thing to help add to profit, as soon as the increase in vega makes a good profit for you, you should close out and enjoy your money. Do I have the general idea?
SPX Sept 1310 straddle is $9 :eek:
NO I am talking myself in circles, yes you are long more than you are short.
What I should have said is that it is not a vol play and the vol changes will not affect the position as much. It is focused on the same ideas as the credit spread. Working to have the short expire worthless but with the diagonal you have more profit potentials than the regular vertical credit spread..
What I should have said is that it is not a vol play and the vol changes will not affect the position as much. It is focused on the same ideas as the credit spread. Working to have the short expire worthless but with the diagonal you have more profit potentials than the regular vertical credit spread..
You have to see how close to the money you can go for that dime because most sets are pretty tame and even a few withings are maybe 7- 10 points. Test it on paper tomorrow...
I tihnk market makers want to avoid the lottery payoff so they may price CTM strikes accordingly.
I tihnk market makers want to avoid the lottery payoff so they may price CTM strikes accordingly.
Heather...coach tried that last year (on behalf of all of us
) didn't work that well