SPX Credit Spread Trader

a little late, but what the hell....

Quote from rallymode:

I cant help but note how this is turning into a "figure out the way mav trades" discussion. I dont want to be rude but it almost sounds like people are asking for a handout. In my opinion, if you haven't figured out the way mav trades by now, you will not be able to manage the greek risk of his month to month approach anyway, much less pull income out of it.

Below is the biggest giveaway for all you "detectives" out there. There is only one way to achieve this. Perhaps you should do you homework.
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Quote from Maverick74:

Let's just say I'm a premium seller that is net long contracts that attempts to own as much curvature as possible for little or no cost.


this is what he does (and so do i):

backspreads, short back month(1), long front month(2)
also, short closer to the money(1) and long wings(2) further out
always being long more higher (for puts) and short lower (for puts) constantly adding and adjusting; waiting for big moves...
 
Quote from Traveler:

I'm over 100 pages late to this party, but can I ask a simple question?

Is there a theoretical edge to this method or does it come from directional bets on the SPX with a wider margin of error due to time decay working in your favor?

Traveler
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As Mav always said, the edge is in the selling.
 
<< Quote from rallymode:

I cant help but note how this is turning into a "figure out the way mav trades" discussion. I dont want to be rude but it almost sounds like people are asking for a handout. In my opinion, if you haven't figured out the way mav trades by now, you will not be able to manage the greek risk of his month to month approach anyway, much less pull income out of it. >>

I hope that you are mis-judging your fellow posters.

AFAIC Mav is imitating the Riddler from a poorly scripted Batman episode.

From my viewpoint, Mav hides behind the greek lingo in order to lure insecure traders to prop trading, in which he has a vested interest.

There are enough 'straight talkers' on this forum to clear up most of the greek issues (including you).

I suspect that the most vulnerable group, ie. "figure out the way mav trades", might be those who have the greatest need to be successful quickly.

Think about it... anyone who wants to talk the 'greek lingo' w/o taking the time to give simple examples is being deliberatly obscure.

JMO... D
 
Quote from MechTrade:

<< Quote from rallymode:

I cant help but note how this is turning into a "figure out the way mav trades" discussion. I dont want to be rude but it almost sounds like people are asking for a handout. In my opinion, if you haven't figured out the way mav trades by now, you will not be able to manage the greek risk of his month to month approach anyway, much less pull income out of it. >>

I hope that you are mis-judging your fellow posters.

AFAIC Mav is imitating the Riddler from a poorly scripted Batman episode.

From my viewpoint, Mav hides behind the greek lingo in order to lure insecure traders to prop trading, in which he has a vested interest.

There are enough 'straight talkers' on this forum to clear up most of the greek issues (including you).

I suspect that the most vulnerable group, ie. "figure out the way mav trades", might be those who have the greatest need to be successful quickly.

Think about it... anyone who wants to talk the 'greek lingo' w/o taking the time to give simple examples is being deliberatly obscure.

JMO... D
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OMG, I love the conspiracy theories. If it's not the PPT holding up the market, or "they" who manipulate the market, now we have a Mav is being evasive to lure unsuspecting souls to his prop firm. LOL. Hey MechTrade, if you are having that much trouble with the "lingo", pick up a copy of Natenburg and get up to speed. It's not that difficult. I can't make you read the book, you'll have to do that on your own.
 
Quote from Maverick74:

OMG, I love the conspiracy theories. If it's not the PPT holding up the market, or "they" who manipulate the market, now we have a Mav is being evasive to lure unsuspecting souls to his prop firm. LOL. Hey MechTrade, if you are having that much trouble with the "lingo", pick up a copy of Natenburg and get up to speed. It's not that difficult. I can't make you read the book, you'll have to do that on your own.
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Glad you took my post in the proper spirit. Mine is not a conspiracy theory, Nor do I accuse you of manipulating the market.

I don't have that much trouble with your 'lingo'. I think I have a pretty good understanding of your intent.

You don't need to make me do anything. I'll be happy to research Natenburg, and I appreciate your guidance. If it isn't that difficult, then I'll pick up on it.

All I'm saying is that when you use the 'Lingo' (referring to Greeks), then how difficult would it be for you to give examples of trades that would illustrate the concepts, rather than telling everyone that they aren't bright enough to decipher a complex notion?

I acknowledge that you are a street wise trader with significant 'inside' knowledge relating options trading.

I just think that you could be a little more transparent regarding trading style if you so chose.

After all, this forum was started by Phil upon the premise of posting actual trades to illustrate technique.

If I offended you then I apologize.

D
 
Quote from LeonPhelps:

As Mav always said, the edge is in the selling.
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Edge in selling? Depends on what someone pays you to buy the option you're selling. Being on the right side of interest rates helps, of course.

No free lunch.

The edge is in being on the right side of a theoretically mispriced option (see Natenberg on hedging, sometimes called gamma scalping). Very difficult for us retail traders.

The edge goes the market makers, who make money off of the spread if they can hedge properly. And the edge isn't cheap (check out the price of seats on the CBOE).
 
Quote from MechTrade:



All I'm saying is that when you use the 'Lingo' (referring to Greeks), then how difficult would it be for you to give examples of trades that would illustrate the concepts, rather than telling everyone that they aren't bright enough to decipher a complex notion?

I just think that you could be a little more transparent regarding trading style if you so chose.

After all, this forum was started by Phil upon the premise of posting actual trades to illustrate technique.

D
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I don't think I have ever commented on the intellect of those on this thread. As for me giving examples of my trades, I'm afraid it's not that easy. And since I don't have the time to walk people through the 4 to 6 week process that is involved in legging into, adjusting and rolling a given spread, it's best that I don't half ass it and try to summarize it. All that will do is lead to a thousand questions I don't have time to answer. My trades are not black and white. They are many shades of grey and not easy to comprehend because they heavily rely on the user, not the strategy.

I was not offended by your comment on my elusiveness but rather your comment on my ambiguity being a ploy to attract traders which of course is absurd.
 
I asked a veteran australian trader about mav's riddle and the below is his answer, if anyone is interested.

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The riddle in plain English is having a strategy where a trader sells ITM calls and uses the premium received to buy double the amout of OTM calls to maximise any upside potential.

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Quote from domestic:

a little late, but what the hell....



Quote from Maverick74:

Let's just say I'm a premium seller that is net long contracts that attempts to own as much curvature as possible for little or no cost.


this is what he does (and so do i):

backspreads, short back month(1), long front month(2)
also, short closer to the money(1) and long wings(2) further out
always being long more higher (for puts) and short lower (for puts) constantly adding and adjusting; waiting for big moves...
More...
 
Quote from Heatheranderson:

I asked a veteran australian trader about mav's riddle and the below is his answer, if anyone is interested.

-----------------------------------------------------------------------------------
The riddle in plain English is having a strategy where a trader sells ITM calls and uses the premium received to buy double the amount of OTM calls to maximise any upside potential.

-----------------------------------------------------------------------------------
More...

Actually that is not what I do. I have stated many times on this thread that I do not trade "hard deltas". Selling ITM calls would be trading hard deltas. I trade very soft deltas.

Selling an ITM call and buying a long OTM call is almost identical to being long a put. In other words, you could substitute a short future for the short ITM call if it's deep enough. Short future/long call is a synthetic long put. Therefore, the long put plus the extra long call is nothing more then a straddle. If you graph that position, that is very close to what you have over a narrow range of prices. I do not trade long straddles.

I don't know how veteran that guy is in Australia, but he needs a little work on his position dissections. LOL. I guess the riddle continues. :)
 
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