SPX Credit Spread Trader

Quote from domestic:

rally, in my earlier post, i did want to bust your balls a little about the put spreads :)

even though i had very little on, i still had some in the high 600's for 1pt. just not nearly my normal monthly amount.

yip, my trading is not naked anymore. i use spreads in all; so i would not call it "unlimited risk strategy".
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I thought you shorted the er2 apr put without any long put to cover it after you covered your long mar put.
 
Quote from yip1997:

I thought you shorted the er2 apr put without any long put to cover it after you covered your long mar put.
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yip, you are correct. with all that has been going on, the timeline gets confusing.

i was unhedged for one overnight. i did have sell stop's to go short on er2 active just above my short puts. the next day i bought longs, and then after the runnup, i closed the short puts that were open. they went down below what i sold them for. sorry for the confusion.
 
Quote from domestic:

yip, you are correct. with all that has been going on, the timeline gets confusing.

i was unhedged for one overnight. i did have sell stop's to go short on er2 active just above my short puts. the next day i bought longs, and then after the runnup, i closed the short puts that were open. they went down below what i sold them for. sorry for the confusion.
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Domestic,

With the recent roller coaster, i found it easier to manage a single-leg position than a spread. What is your opinion in managing naked options (since you have done a lot of naked writings in the past)?

[edit] did you buy the mar put x 1 and sell the apr put x 2? Is that also unlimited risk?
 
:)

I just wanted to thank Donald Tomnitz (CEO) of DR Horton for making "suck" an acceptable description for bad trades.

I still can't stop laughing at all these CNBC dudes trying to spit out "suck" with a straight face. :D
 
Yes, I'm seeing the same thing.

This week with the SPX at 1380 and VIX at about 19 I sold an April 1475/1490 bear call for $0.75.

Today, with the SPX at 1406.6 and the VIX at about 13.6 here is what TOS quotes for this spread.

natural at $0.35
mid at $0.75

So right now it would be very difficult to get $0.75 for this spread.


Quote from Cache Landing:

I think Big Ben causes a bit of a rally tomorrow that will be completely erased monday. That said, I really like the FEB 1430/1440 bear call tomorrow. I sold the SPY counterpart (143/144) today and got a great credit for it.

One thing to remember about this situation for those who might be holding for a bit more upside to sell bear calls. A 10 pt rally will result in at least -100bp vols. The credit recieved will be almost identical before and after the positive print.

Just something to think about. VIX was about 18 when I sold my bear calls. I had to leg in because when vols get crazy spreads don't get filled easily.
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I managed to call the market move into this range (1405'ish) properly but now am in a pickle on what to do. I was hoping to get a slower rise up and a coast into March SET in the 1405-1420 range . I put on some heavy CALL spreads closer in than I normally would (1420/1430) for good premium to mitigate some of the cash risk to the downside PUTS I was into (and in trouble with earlier). But volatility is still too high to make it cost effective to close out all positions simultaneously right here. Putting on long curvature also seems to be too cost intensive due to vol. Even the upside could be violent if puts unwind next week but that should drop vol a fair amount.

There are so many macro factors at play now (Yen, Put unwinds next week, and at least 2 major econ reports through SET formation). Anyone have any trading ideas short of taking steep exit losses that are currently not in the money or short of gambling on relative stability around this current level through SET?

TS
 
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