SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
The Feb put spread is my first credit spread for Feb profit. This is only one of the many spreads (verticals and diagonals) I will do in the next 2 weeks. I don't see any reason to worry about it now. I believe RUT is not in the downtrend yet.
I too only trade RUT. If RUT stays within your channel, I will have a pretty good return this month. Good luck to both of us.
When you accept 0.50 to 0.90c for RUT spread, it's normal that you panic 17 points away.
The 770/760 spread in question gives me a total of 7.30 for a condor.
I don't accept less than 1.60 on any trade; I already know how much I am willing to lose when I put the trade; So I don't panic even when my short is violated.
The big difference is CTM, ITM, FOTM. I don't go FOTM unless I want some extra money and I close them as soon as a trend is broken.
For example I got 1.10 for 40 RUT Jan 740/730; Once the MA(50) is broken, I am willing to close it.
I hope you understand why I don't panic.
The 770/760 spread in question gives me a total of 7.30 for a condor.
I don't accept less than 1.60 on any trade; I already know how much I am willing to lose when I put the trade; So I don't panic even when my short is violated.
The big difference is CTM, ITM, FOTM. I don't go FOTM unless I want some extra money and I close them as soon as a trend is broken.
For example I got 1.10 for 40 RUT Jan 740/730; Once the MA(50) is broken, I am willing to close it.
I hope you understand why I don't panic.
Anyone have an opinion on if its more effective/efficient to put on positions directly on RUT or in the ISHARES RUSSELL 2000 INDEX FD underlying (e.g. IWM)? I seem to be getting very tight spreads and high trade volume/liquidity on IWM positions I put on so far.
TS
TS
Current issue of FUTURES magazine compares RUT, IWM and ER2 options, which is relevant to the current discussion. Check it out 
The only reason I questioned the FEb PUT position is because I know RUT and the general market are overextended and the downside is much greater than the upside.
Me I trade mostly on technical. When you enter based on overbought/oversold criteria, the profit potential is much more.
My two cents.
Me I trade mostly on technical. When you enter based on overbought/oversold criteria, the profit potential is much more.
My two cents.
Where does the word 'panic' enter into the discussion?
What I do not understand is why you are comfortable with your position - one that is close to the money - one that might become a big loser shortly, but you call the other position 'daring'. That other position has 4 weeks longer before it expires, but the short option is 40 points further OTM.
The price at which you initiated your position is immateria. That you never sell for less than 1.60 has no relevance when it come to comparing two different positions. Those positions must stand on their own - current risk vs. current potential reward when making the comparison.
I'd take that more 'daring' positon anytime over yours.
Mark