SPX Credit Spread Trader

RichardRimes · Dec 7, 2006

Quote from TrendSailor:

t.
I was thinking I could double up or increase # of contracts on the Bull Put spreads and with low VIX take cheap lotto ticket calls to profit by upside motion; or take limited profits and limited risk with bull call debit spreads.

TS

As soon as you double your # contracts on downside credit spreads the market will take you out. :eek:

IC strategy is best in trendless markets thus putting this on the back burner is probably the best. I've decided that IF I have a strong directional opinion then I will BUY a debit spread in that direction. If that DOES pay off then you can bank some of the profits by selling the debit spread creating a condor or B-fly it.

yip1997 · Dec 7, 2006

Quote from dagnyt:

OK. You and Coach Phil have convinced me. I am downloading the software as I write this.

Mark

It seems that TOS doesn't have the level 2 option quote. I was told that IB provides the level 2 quote. I am actually opening an IB account to compare these two software.

RichardRimes · Dec 7, 2006

Quote from RichardRimes:

As soon as you double your # contracts on downside credit spreads the market will take you out. :eek:

IC strategy is best in trendless markets thus putting this on the back burner is probably the best. I've decided that IF I have a strong directional opinion then I will BUY a debit spread in that direction. If that DOES pay off then you can bank some of the profits by selling the debit spread creating a condor or B-fly it.

meant selling the CREDIT spread....

No Option · Dec 7, 2006

Yip:

TOS does have level 2 available.

You have to ask for it - it is not automatic.

They do not charge for level 2.

Enjoy!

ryank · Dec 7, 2006

Quote from TrendSailor:

Thoughts on how to best profit to the SPX upside motion if my TA and macro views are correct? My objective is to derive fairly consistent income each calendar month in much the same way I have been enjoying with full IC in the higher VIX past. I was thinking I could double up or increase # of contracts on the Bull Put spreads and with low VIX take cheap lotto ticket calls to profit by upside motion; or take limited profits and limited risk with bull call debit spreads.

TS

After some prodding by other ET members, I opened some calendars for a debit. I haven't been able to find any credit spreads or diagonals I like for SPX so I am now adding more tools to my options toolbox.

RCMLLC · Dec 7, 2006

TOS does have Level 2 options quote. On the trade screen, left click on the exchange symbol next to the particular option you are interested in and you will see price grid appear above.

Quote from yip1997:

It seems that TOS doesn't have the level 2 option quote. I was told that IB provides the level 2 quote. I am actually opening an IB account to compare these two software.

billp · Dec 8, 2006

Pls correct me if I'm wrong. I don't think that it is a real Level 2. Reason I make this remark is because I am looking at stocks (not options) and the 'Trade grid/market depth' for stocks just contain 'best price for exchange', whereas in a real Level II, you will see much more such as market makers etc. I've ever compared level II (as provided by esignal) versus TOS trade grid/market depth, and they are different. [Have never compared the level II for options between esignal and TOS, so can't really tell but it seems that the trade grid/market depth for options in TOS is the same as the stocks in TOS]. Also, (this may not be applicable for options), at times one can't see the total quantity for each exchange when the quantity is larger (as TOS has limited space and you are not allowed to widen the width column for the trade grid/market depth).

Quote from RCMLLC:

TOS does have Level 2 options quote. On the trade screen, left click on the exchange symbol next to the particular option you are interested in and you will see price grid appear above.

billp · Dec 8, 2006

Sorry to write this here instead of starting a new thread, but can anybody comment on the TOS demo execution. It seems that I can easily get fills at a good rate and many times between the bid/ask spread. Also, the speed at getting filled is pretty instantaneous. I don't recall this at all when I was doing real trading. (this applies to both options and stocks). Thanks

IV_Trader · Dec 8, 2006

Quote from ryank:

After some prodding by other ET members, I opened some calendars for a debit. I haven't been able to find any credit spreads or diagonals I like for SPX so I am now adding more tools to my options toolbox.

Ryan , If you opened double calendars ( both puts and calls) , try to gamma scalp back (long) month in purpose to reduce its "cost of rent". It's a bit complex with calendars , maybe you should do just paper adjustments for the first time.
Good luck

ryank · Dec 8, 2006

Quote from IV_Trader:

Ryan , If you opened double calendars ( both puts and calls) , try to gamma scalp back (long) month in purpose to reduce its "cost of rent". It's a bit complex with calendars , maybe you should do just paper adjustments for the first time.
Good luck

I do have put and call calendars. I've only heard of gamma scalping but have never done it before. Can you give me an example? I would think you mean to take profits on the back month options as they appear (sell back month option) and then buy another back month option to stay covered on my short.