SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Whoa Risk....
Since no one here signs my payout checks, it is not my job to worry about others losses LOL
. If I am to be responsible for others losses then where is all the money owed to me for the gains 
Moreover, your criticisms are very limited. I have not made any shift at all since I have always done credit spreads from the beginning and maybe have put on like 3 diagonals recently. The cross-month FLYs is an attempt to achieve the same rewards but by drastically reducing my risk and margin. 2 or 3 cross flys spread out along several strikes creates a very nice risk reward. I have not shared the specific details because I am not done modelling and testing.If the market stagnates even 4 months in a row and I did nto set up the strikes correctly and take a loss, I just need one good month to wipe that out easily and be net positive. Much like the idea of buying OTM spreads and waiting for the winner to come. however my approach has a higher probability.
Moreover on SPX, IV increases is more probably than decreases and the decrease risk is maybe another 200 basis points while the upside range is huge. IV increase help the position and IV decreases only hurt slighlty or barely.
Moreover, why is +gamma a losing strategy if the market stagnates. It all depends on where you select your strikes and how play the strategy. Also, the modelling I have done in selecting the stirkes leads to the most profit IF the market stagnates in a range. I think you are only looking at the GOOG trade ( a fun direction bet) and the one OTM SPX I also tested but I have described how I would use the Cross-Flys much like the diagonal positions.
The analysis is still the same, profiting off of an expectation that the market will stay within a certain range (like in IC or DDs).
I know my options knowedge is a pinky to your hand, but you are pointing at a Greek of the position in isolation. Doesn't it matter where you place the strikes and in what combinations. EVERY position has a Greek hole so no position will be Greek perfect. IV is low but how can we say statistical volaitlity is low, that is clearly not the case by any means.
So in sum I make 3 points:
1. This will be the last time anyone puts other people's trading accounts on my shoulders.
I have clients who do that and I get compensated for it LOL. That is not what the thread was about.
2. One position has -gamma/-vega and is bad. One position has +gamma and +vega and is bad. Therefore I will stick with the 0gamma/0vega positions.
3. I will stick with SPX spread trades and leave out my futures and non-SPX trades as they detract from the focus of the thread and lead to some swirly tangents. Also, I think the futures trades are more advanced than many here wish to trade and that was not my intent. The Goog was a fun bet that worked out. My goal this year in the prop account was test and trade many different futures and options on futures strategies that I had been researching and could not do in retail. Some work well, others did not. But that research is not relevant really for others except MAV (lol) so I apologize for the diversion. We will move back to SPX spreads as the title states and I am sure that will make many SPX spreaders hapy.
Since no one here signs my payout checks, it is not my job to worry about others losses LOL
. If I am to be responsible for others losses then where is all the money owed to me for the gains Moreover, your criticisms are very limited. I have not made any shift at all since I have always done credit spreads from the beginning and maybe have put on like 3 diagonals recently. The cross-month FLYs is an attempt to achieve the same rewards but by drastically reducing my risk and margin. 2 or 3 cross flys spread out along several strikes creates a very nice risk reward. I have not shared the specific details because I am not done modelling and testing.If the market stagnates even 4 months in a row and I did nto set up the strikes correctly and take a loss, I just need one good month to wipe that out easily and be net positive. Much like the idea of buying OTM spreads and waiting for the winner to come. however my approach has a higher probability.
Moreover on SPX, IV increases is more probably than decreases and the decrease risk is maybe another 200 basis points while the upside range is huge. IV increase help the position and IV decreases only hurt slighlty or barely.
Moreover, why is +gamma a losing strategy if the market stagnates. It all depends on where you select your strikes and how play the strategy. Also, the modelling I have done in selecting the stirkes leads to the most profit IF the market stagnates in a range. I think you are only looking at the GOOG trade ( a fun direction bet) and the one OTM SPX I also tested but I have described how I would use the Cross-Flys much like the diagonal positions.
The analysis is still the same, profiting off of an expectation that the market will stay within a certain range (like in IC or DDs).
I know my options knowedge is a pinky to your hand, but you are pointing at a Greek of the position in isolation. Doesn't it matter where you place the strikes and in what combinations. EVERY position has a Greek hole so no position will be Greek perfect. IV is low but how can we say statistical volaitlity is low, that is clearly not the case by any means.
So in sum I make 3 points:
1. This will be the last time anyone puts other people's trading accounts on my shoulders.
I have clients who do that and I get compensated for it LOL. That is not what the thread was about.2. One position has -gamma/-vega and is bad. One position has +gamma and +vega and is bad. Therefore I will stick with the 0gamma/0vega positions.
3. I will stick with SPX spread trades and leave out my futures and non-SPX trades as they detract from the focus of the thread and lead to some swirly tangents. Also, I think the futures trades are more advanced than many here wish to trade and that was not my intent. The Goog was a fun bet that worked out. My goal this year in the prop account was test and trade many different futures and options on futures strategies that I had been researching and could not do in retail. Some work well, others did not. But that research is not relevant really for others except MAV (lol) so I apologize for the diversion. We will move back to SPX spreads as the title states and I am sure that will make many SPX spreaders hapy.
Well i much rather focus on the risk not the profit and in my opinion the risk is much less with the short calendar combo. A flat goog open would've killed you if i am "guess modeling" these correctly. I still stand behind my previous statement that TOS isnt modeling the cross month flies properly. Very hard to get a clear risk/reward profile unless you solve for the skew(intermonth AND tenor) which TOS doesnt. But i guess we will know soon enough as you are trading them live. I give you credit for putting your $$ on the line.
Don't forget that the GOOG was a one time bet using the FLYs. It worked out because GOOG moved. I do not intend to play with this kind of position.
As for your short calendar combo I never memorized GOPKLs and things like that. Which strikes were you using for the put and call calendars and were they ITM short calendars?
As for your short calendar combo I never memorized GOPKLs and things like that. Which strikes were you using for the put and call calendars and were they ITM short calendars?
i would not eliminate non-spx postings entirely. maybe start a different thread...possibly? the success of this thread imo has been the real time coverage of your and others trades. as you try other types of trades, i find it very interesting; although it must be difficult to endure some responses.
anyway, i do appreciate your sharing of some of your trades. reading them is so much better than reading rants and theories that abound on other threads here.
Closed both GOOG Cross Flys for a net credit of $6.05
Cost = $1.55
Profit = $4.50 or $2,250 total
Not bad for a little earnings fun lol...
Cost = $1.55
Profit = $4.50 or $2,250 total
Not bad for a little earnings fun lol...
Ditto.
It must be Phil's lawyer training that lets him keep his cool
I thought all internet discussion threads were legally required to devolve into a flame war. This has been an outstanding break from the usual fiery fare. The credit (heh) for that goes to Phil.
I know a couple of the hardcore spread-only people are turned off by all the discussion of other strategies. But I also think this month's action is a good demonstration of why it is helpful to have more than 1 bullet in the gun. Just keep the thing pointed in a safe direction...
It must be Phil's lawyer training that lets him keep his cool
I thought all internet discussion threads were legally required to devolve into a flame war. This has been an outstanding break from the usual fiery fare. The credit (heh) for that goes to Phil.
I know a couple of the hardcore spread-only people are turned off by all the discussion of other strategies. But I also think this month's action is a good demonstration of why it is helpful to have more than 1 bullet in the gun. Just keep the thing pointed in a safe direction...