Bro, I've read your journal and I've counted all the no touches that touched and the bad hedges. I'm not trying to discredit the strategy, just saying you can buy all the otm touches you want, you are making a DIRECTIONAL bet. You have an entire journal of these trades to go through. At least 90% of your trades never carried that deep OTM touch, at least you never posted it. I'm just going by what I saw on your journal. Feel free to link me 5 trades you made that carried that extra long OTM touch, I never saw one but I didn't read the journal much, just skimmed it. I think you did have a lot of bad luck on a lot of those but as you freely admitted in your journal, whipsaw is one of the downsides.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Bro, I've read your journal and I've counted all the no touches that touched and the bad hedges. I'm not trying to discredit the strategy, just saying you can buy all the otm touches you want, you are making a DIRECTIONAL bet. You have an entire journal of these trades to go through. At least 90% of your trades never carried that deep OTM touch, at least you never posted it. I'm just going by what I saw on your journal. Feel free to link me 5 trades you made that carried that extra long OTM touch, I never saw one but I didn't read the journal much, just skimmed it. I think you did have a lot of bad luck on a lot of those but as you freely admitted in your journal, whipsaw is one of the downsides.
Yup, it's true that I didn't buy many touch bets in the journal. It's also true that the OPM account went from 5 to 12 million on those horrific, bad hedges. Also true that on 15-20% of the positions the barrier expectancy was nearly doubled as the result of hedging. Nope, ain't my money, but I'll live with the 15% perf fee.
I am sure you're not trading the same methods as you did as a rank newbie. I've been trading exotics less than 18months. A lot has changed in that time.
I underlined your immaterial statement. #1. It's a bet on stat vols much more so than direction. It's analogous to reverse digital option or a double barrier w/the 1:4 to 1:10 touch-hedge. #2. More importantly, it makes no difference whether or not it's a DIRECTIONAL bet; we're talking about HEDGES and RISK, not a directional bias.
Phil just called. He told me to tell you to expect a very strongly worded response tomorrow to your criticism of the DOTM credit spreads. I think I hear Donna breathing heavy too. Dude, you stirred up a hornets nest here. I'm outie......
Yawn......
It would be a more interesting addition to the journal if you both spoke English...
And futures are just a portion of the Phil Dynasty. I still make the jelly for my bagel with options (now primarily options on futures lol).
And even more jelly now that I have added diagonals to the mix with ES and EW options
It would be a more interesting addition to the journal if you both spoke English...
And futures are just a portion of the Phil Dynasty. I still make the jelly for my bagel with options (now primarily options on futures lol).
And even more jelly now that I have added diagonals to the mix with ES and EW options
Phil...why the prefrence for options on futures? RA my husband screens ALL my mail
I like the choices the options on futures give me with respect to the S&P since there are regular options and end of month options as well. Also the b/a spreads are not as wide and it is easier to shave off of them.
I still do SPX spreads in the retail account but for the prop I like the futures options and the platform I trade them on.
I still do SPX spreads in the retail account but for the prop I like the futures options and the platform I trade them on.
Quote from RichardRimes:
Phil...why the prefrence for options on futures? RA my husband screens ALL my mail
The SPX is still the bread and butter and I still trade it. I had a large position for August and hedl it to expiration and then SEP expiration was too close for me to get any decent premium at the strikes I was looking at.
Since the market has been moving higher I have not found a good entry for my put spreads for OCT so I am still without an OCT SPX spread but looking to seeif anything is attractive on this minor down day.
The diagonal discussions have grown, especially as I now use them on the call side, but SPX is still the King for S&P otm spreads
Since the market has been moving higher I have not found a good entry for my put spreads for OCT so I am still without an OCT SPX spread but looking to seeif anything is attractive on this minor down day.
The diagonal discussions have grown, especially as I now use them on the call side, but SPX is still the King for S&P otm spreads
Regarding buying options at the close prior to expiration... I too have tried this but don't trade them anymore. It doesnât appear to me to be a profitable strategy long-term. I have analyzed 3 years worth of data looking at Thursday close vs settlement on SPX, NDX, OEX. I looked at variables such as p/c ratio, VIX, max pain, volume, and trend going into expiration. There appears to be no recognizable pattern or predictor that the settlement price is susceptible to being whacked. It was random. Having said that, the 4 best strategies I could come up with were:
#1) On Thursday Buy the ATM SPX call about an hour before close for approximately $3 and hope the settlement is higher by at least $3.
#2) Same as #1 but buy the bull call spread.
#3) Same as #1 but buy the CTM SPX call for less than $1 and hope a big move happens.
#4) Same as #1 using OEX. At least this can be closed Friday morning and not be a total loss. This occasionally resulted in a double, but requires having the STC order pending on the open.
#1) On Thursday Buy the ATM SPX call about an hour before close for approximately $3 and hope the settlement is higher by at least $3.
#2) Same as #1 but buy the bull call spread.
#3) Same as #1 but buy the CTM SPX call for less than $1 and hope a big move happens.
#4) Same as #1 using OEX. At least this can be closed Friday morning and not be a total loss. This occasionally resulted in a double, but requires having the STC order pending on the open.