SPX Credit Spread Trader

END OF YEAR SUMMARY:

Another good year for SPX spreads although it got difficult at the end with the market surging, VIX dropping and rare few down days to jump in on put spreads for NOV or DEC.

Final net profit for 2006 : $71,759.50

Assuming average risk margin of $250k to $300k over the year the return is an average of 25% for the year.

This has been a great thread and like all good things it is time to end it. I naively put myself out there and some personal information has come back to me from 3rd parties which means I should not have my information out there. This is an anonymous message board so I have no control over what is done with my personal information and best way to check it is to pullback. I might have been a little too naive.

It has been a great learning experience and I will continue to post on ET but I will no longer post my trades or positions here on this thread or anywhere else in ET.

I of course will not close the thread so others can keep it going if they wish and I will still contribute what I can other than my positions.

Thank you all for a great ride and wonderful educational exchange. I hope you all have benefitted as much as I have. I look forward to keeping the discussions going.
 
Quote from optioncoach:

END OF YEAR SUMMARY:



Final net profit for 2006 : $71,759.50

Assuming average risk margin of $250k to $300k over the year the return is an average of 25% for the year.
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Phil,

1. Congratulations. It has been great thread.

2. Anything about Drawdowns ?
 
thankfully no real drawdowns this year. I had some close calls but the partial hedges worked to force the market the other way a la Coach Phil Contrarian Indicator lol. The June drop caused some slight sweats but I was far enough OTM and expiration could not have come soon enough. I may have adjusted down once I would have to look back since it was so long ago.

Quote from ChrisM:

Phil,

1. Congratulations. It has been great thread.

2. Anything about Drawdowns ?
More...
 
Quote from optioncoach:

END OF YEAR SUMMARY:

Another good year for SPX spreads although it got difficult at the end with the market surging, VIX dropping and rare few down days to jump in on put spreads for NOV or DEC.

Final net profit for 2006 : $71,759.50

Assuming average risk margin of $250k to $300k over the year the return is an average of 25% for the year.

This has been a great thread and like all good things it is time to end it. I naively put myself out there and some personal information has come back to me from 3rd parties which means I should not have my information out there. This is an anonymous message board so I have no control over what is done with my personal information and best way to check it is to pullback. I might have been a little too naive.

It has been a great learning experience and I will continue to post on ET but I will no longer post my trades or positions here on this thread or anywhere else in ET.

I of course will not close the thread so others can keep it going if they wish and I will still contribute what I can other than my positions.

Thank you all for a great ride and wonderful educational exchange. I hope you all have benefitted as much as I have. I look forward to keeping the discussions going.
More...

Coach,

Thanks a lot for this wonderful thread. I have learned a lot in this thread.

I wish all of us will have a bigger success in the coming year, and continue with the original spirit of this thread - discussion on trading strategies. No more fights nor personal attacks. :D
 
Quote from uglyboy:

RR, great explanation of your vision. It is definitely a cut above the buy and hope strategy that most people have. What is your experience wrt the possibility and profitability of this type of approach in the current market?

Ugly
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I have no experience other than the current Jan and Feb spreads on...I'm taking a page from you and will increase the spread on the debit side of the trade in the future.

Phil, this thread has been awesome and so many of us have benefited by th generous contribution of your real time position trades and thought processes with ensuing debate and discussion. I believe most of us have tried to make small contributions in the spirit of the thread as well. It will be on my desktop for as long as I'm trading and ET is around :D THANK YOU!
 
After reading the first 1500 messages I have been having great success with simple net credit spreads on the SPX, NDX and RUT indexes. I have moved my IRA accounts to my brokerage account and continue to add funds and invest all my credits. I had to close my first Bear Call SPX spreads in Oct and Nov but the debits were more than offset with all the Bull Put SPX, NDX and RUT credits accumulated during these 2 months.

This is a Jan07 NDX Bear Call Trade filled this morning:

NDX 10 Contracts, 1850/1875, .85 cents,

This is the Jan07 NDX Bull Put Trade filled on Dec 19th:

NDX 10 Contracts, 1650/1625, .85 cents

This a very good return for an Iron Condor tarde with short options 100 points from the current Index price.
 
END OF YEAR SUMMARY:

Another good year for SPX spreads although it got difficult at the end with the market surging, VIX dropping and rare few down days to jump in on put spreads for NOV or DEC.

Final net profit for 2006 : $71,759.50


Sweet,

If I could be quaranteed of making only half that much doing credit spreads I'd retire to tomorrow. Thanks for sharing your knowledge and putting up with newbie questions coach.
 
I have been using a strategy similar to yours since 03 but with s&p futures, the main difference being the position is naked, I use t-bills as margin instead of cash.

One of the problems I have had with this strategy is as you begin to accrue profits and profits accrue regularly, it is tempting to reinvest gains & increase postion size, yet the danger is, when the inevitable blowout occurs you could wipe out most of your gains if you have added too much to your postion size.

One of the problems with trading multiple indicies is risk tends to be too correlated.In the event of a crash all the indicies will get killed at once.

I have been looking for ways to diversify/spread risk and reinvest profits, by looking at other types of trading & markets, I did look at spreads on equities but again most of the liquid optionable equities have too much correlated risk to the S&P. When the S&P takes a dive they almost all get hit together.

I found good diversification and liquidity in futures such as silver,soybeans coffee etc ,I was wondering if you had tried a similar strategy with commodities, would you consider going naked in any of these markets with the benefit of SPAN margin or do you always go for spreads.

Regards

GM
 
Quote from Marshall:

I found good diversification and liquidity in futures such as silver,soybeans coffee etc ,I was wondering if you had tried a similar strategy with commodities, would you consider going naked in any of these markets with the benefit of SPAN margin or do you always go for spreads.

Regards

GM
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Talking about SPAN, which products have SPAN margin besides CME/Globex in the US? And is SPAN ever introduced in the US? I'm from Europe and almost every exchanges uses SPAN.

Thanks,
FT79
 
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