SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
BINGO.... you got it.
It's like a WIN-WIN...
Too many people buy Call Calendars... (which i used to do a lot of and was successful trading when the VIX was in the 20's)... but you get hurt as the volatility bleeds out against the direction you would predicted the movement to make.
It's hard enough predicting market direction, but then fight volatility also... No Thanks.
The Put Diagonal or Double Diagonal placed at low volatility levels, doesn't necessarily guarantee profit, but it sure puts the ODDs (VEGA, THETA, DELTA) in your favor.... and I like those ODDS alot.
Murray
It's like a WIN-WIN...
Too many people buy Call Calendars... (which i used to do a lot of and was successful trading when the VIX was in the 20's)... but you get hurt as the volatility bleeds out against the direction you would predicted the movement to make.
It's hard enough predicting market direction, but then fight volatility also... No Thanks.
The Put Diagonal or Double Diagonal placed at low volatility levels, doesn't necessarily guarantee profit, but it sure puts the ODDs (VEGA, THETA, DELTA) in your favor.... and I like those ODDS alot.
Murray
M, sorry..what do you mean by move up by 25 points..r u saying 1250/1270 or 1200/1220..
Thanks
MK
I have Sep 1250 put / Oct 1225 put spread. I opened this trade when SPX was 1293. Now, I have a loss of 600. I have the following adjustment options.
1. Sell the whole spread and take a lose of 625.
2. Convert into bull put spread 1235/1225
3. Convert into Bear put spread 1215/1225.
4. Sell 1225 put when there is small correction in SPX after exipration.
I know the best option depends upon the market direction. I want to get your thoughts on this.
1. Sell the whole spread and take a lose of 625.
2. Convert into bull put spread 1235/1225
3. Convert into Bear put spread 1215/1225.
4. Sell 1225 put when there is small correction in SPX after exipration.
I know the best option depends upon the market direction. I want to get your thoughts on this.
An update on my rut DD.
Sep/Oct 670/630 P @ debit of 0.4. Now I can close for a credit of 1.0.
Sep/Dec 740/800 C @ debit of 2.3. With this multiroll diagonal, I can close it for a credit of 5.2, or sell the Oct 760 for a credit of 5.6. I still haven't decided how to adjust it. Any suggestions?
Sep/Oct 670/630 P @ debit of 0.4. Now I can close for a credit of 1.0.
Sep/Dec 740/800 C @ debit of 2.3. With this multiroll diagonal, I can close it for a credit of 5.2, or sell the Oct 760 for a credit of 5.6. I still haven't decided how to adjust it. Any suggestions?
not much volume in the EOM SEP SPY options but decided to try a diag..ratioed
STO 20 EOM SEP SPY 129 puts
BTO 25 OCT 128 SPY puts
debt on the 20 sep/oct puts .35 and paid .75 for each OCT extra put
STO 20 EOM SEP SPY 129 puts
BTO 25 OCT 128 SPY puts
debt on the 20 sep/oct puts .35 and paid .75 for each OCT extra put
trading for gains in theta is generally predicting where the market will not go. trading for gains in vega is generally predicting where the market will go, due to the vix/vxo high negative correlation to the sp.
the benefits of being short theta and long/neutral vega are immense, ie a calendar on the put side. when predicting market direction there are countless more efficient ways to trade it than calendars.
my 2 cents to keep the eye on the ball, so to speak, is to keep the eye on theta. use theta decay as an anchor, which is why this thread began, then develop the best trade structure to pull that theta down and maintain risk levels.
the benefits of being short theta and long/neutral vega are immense, ie a calendar on the put side. when predicting market direction there are countless more efficient ways to trade it than calendars.
my 2 cents to keep the eye on the ball, so to speak, is to keep the eye on theta. use theta decay as an anchor, which is why this thread began, then develop the best trade structure to pull that theta down and maintain risk levels.