SPX Credit Spread Trader

so, it looks like the SPX 1385/1375 put spread that I sadly closed out last week will not be for naught based on CME's futures right now. Amazing how something went from 75 pts OTM to being run over by a speeding train in less than a week.

The call spreads ease the pain a lil....but only a lil
 
I have heard the expression that sellers of FOTM options...

'eat like chickens and crap like elephants'

I prefer trading much nearer to the fire with ATM options .... However, I work with a guy who succesfully sells FOTM puts on good quality big cap companies after they have taken a beating and vols have been pumped ..... with options you get to choose your own poison

Cheers
James
 
Quote from Maverick74:

I disagree as well. There are many of us that are doing well in this market environment. In fact, for the newbies on this board, this is how the market actually behaved for about 10 years. These kind of markets build great traders and eliminate the bad ones.
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Yes. Good traders continue to go well even with a "bad" strategy. Bad traders do bad even with a "good" strategy. IMO, strategies are always neural.
 
Mark,

How does your extra wings (call-only) work in this environment? My call-only extra wing in far month (June) doesn't help much. Is it because it is too far out?
 
Quote from yip1997:

Mark,

How does your extra wings (call-only) work in this environment? My call-only extra wing in far month (June) doesn't help much. Is it because it is too far out?
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Not owning extra puts, it didn't work well at all. Sure call spreads (with extras) are profitable, but big deal. Puts only thing that count here.

RUT 900s and 950 cannot be expected to help. High IV lets you sell them for something when closing the position, an that's not all bad.

Mark
 
Oh Gawd, wouldn't ya just know it? I tossed the bad 'ol wannabe bear a big CALL bone with March bear credit calls at 1420/1430 for $2 per. Now he is running up toward em.

Basically I am trying to create a trade space between about SPX 1390-1435 to risk mitigate and only stand down a max loss of 50% or less. But I can still get profitable if I can get Mr. Bear to hibernate in the SET 1405-1420 at or near exp.

But it's going to be a bear shoot if traders swap out of foreign ETF money and dump a fair amount into large caps or S&P or we get some M&A or corp buy backs at these levels...

We don't have to be news event driven in this scenario...

TS
 
Quote from optioncoach:

Every one expects it to be messy and nasty like the OCT 87 MOnday crash was after a bad Friday. Therefore I expect the opposite to happen. Volatile but perhaps more ado about nothing once we get to the close.
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Great call Coach....but maybe it'll happen tomorrow :)


I had a zero cost 1380/1330 Mar/April put diagonal. Even that was down. Even that was down about $5 last week when SPX was around 1385. Disastrous leg out for $3 when SPX was around 1403. SHould have only paid only around $1.5 if i didnt try legging out.

Im now left with various 1:2 PUT ratio spreads that are also in the red. The closest strike being 1370/1340 Puts. It doesnt look good but im not too worried. Yet... Macmillan's follow up action is to close them when the underlying is around the breakeven point (ie 1310 in my case) as both of the PUT strikes SHOULD trade around parity. I have my doubts about that parity claim but we'll see. Anyone have any of these trades on ?

Edit: the numbers are for ES instead of SPX
 
Im perplexed. Doesnt this present an arb opportunity :confused:

ES 1380

ES APR 1440 PUT 56.00bid 58.00ask

Doesn't that give a $2 riskless profit

ie buy 1440P @ 58

Buy ES future @ 1380 and exercise
 
APR PUt is based on June contract while current future is MAR future. If you exercise the APR put you are short the JUNE contract not the MAR.

Quote from scoobie27:

Im perplexed. Doesnt this present an arb opportunity :confused:

ES 1380

ES APR 1440 PUT 56.00bid 58.00ask

Doesn't that give a $2 riskless profit

ie buy 1440P @ 58

Buy ES future @ 1380 and exercise
More...
 
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