SPX Credit Spread Trader

hey coach,

what do you think of the possibility of a short covering rally? Any opinions on how far it will extend if it occurs?



hey tplast,

what is the ISEE?

"I removed 1/3 of my hedge at 1329.25 to get some negative deltas, but didn't add to the call credit spreads. I'm not convinced that we are going down yet. Too many people are short, do you guys follow the ISEE? It's at 80"



thanks,
newbie
 
I only see a short covering rally if the Fed says something unexpected in a positive way and we rally strongly, then the shorts will come to cover....

Quote from newbie463:

hey coach,

what do you think of the possibility of a short covering rally? Any opinions on how far it will extend if it occurs?



hey tplast,

what is the ISEE?

"I removed 1/3 of my hedge at 1329.25 to get some negative deltas, but didn't add to the call credit spreads. I'm not convinced that we are going down yet. Too many people are short, do you guys follow the ISEE? It's at 80"



thanks,
newbie
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Quote from newbie463:


hey tplast,

what is the ISEE?
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It is the ISE sentiment index: http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp

It's a call/put ratio but only takes into account long retail orders to open. I don't think the numbers mean much by themselves unless they are at extremes, but I think it would be interesting to see how it compares to the trend and the CBOE p/c ratio. If they start diverging, it may be an indication that the sentiment between retail and institutions is diverging. And you know who will win :p
 
Quote from optioncoach:


If you have a credit spread though the position is not as forgiving as a diagonal so be more vigilant in your decisions to cut losses if you need to.
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Yes thanks, I'm keeping a close watch on them. Right now I have them hedged with long futures, which buys me time until gamma starts increasing in the last few weeks. They were placed CTM, so no big damage is expected.
 
Murray,

Do you have your strikes switched, or are you playing the diagonals different now? In the past, I thought you longs were beyond your shorts.

Tim


Quote from Sailing:

Current Oct/Nov SPX Double Diagonal

BTO Nov SPX 1250p
STO Oct SPX 1275p

BTO Nov SPX 1375c
STO Oct SPX 1350c

If the market stays stagnant.... a small 2-3% profit is expected. Really playing the position to the downside as a VEGA increase could spark returns as great as 25%

We also have a complicated RUT Double Diagonal, with two 'TENT' poles created inbetween with half position put calendars. It's potential return is almost 2 times the SPX Double Diagonal with as much % movement. NOTE though that the RUT is much more volatile than the SPX in general.

M~
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Quote from dqtmg2:

Murray,

Do you have your strikes switched, or are you playing the diagonals different now? In the past, I thought you longs were beyond your shorts.

Tim
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October comes before November :)
 
Call me Hammer...... 'cause I nailed it lol. Well so did many people actually...

P.S. of course now we are going to rally like crazy now that I opened my big mouth lol...

Quote from optioncoach:

The SPX is at long-time highs and I think a lot of what is expected this afternoon is alreayd priced in with the nice run up the last week or so. I do not think the Fed is gonna say anything new and the market might just sell off unless a surprise statements sends us higher.
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Quote from rallymode:

not over yet, sweating bullets in my chair. I am short lots and lots of gamma :D
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This drop isn't quite as quick as you'd hoped for is it? It's oil man. I don't think it can get much lower before I would say that it is really undervalued.
 
Quote from Cache Landing:

This drop isn't quite as quick as you'd hoped for is it? It's oil man. I don't think it can get much lower before I would say that it is really undervalued.
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Well whatever it is needs to stop before i mortgage the house LOL

Seriously, i'm beginning to think oct won't be bad at all, despite everyone being bearish. Perhaps, thats exactly why we will keep rallying to new highs. Admittedly, my PnL will have a wild swing this month, one way or another. :eek:
 
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