SPX Credit Spread Trader

Quote from optioncoach:

You will have to trade through an investment bank like JP Morgan or Sachs, there is no standardized market in an exchange for exotics like regular index options.
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how?. can i open a account with them online?.
 
USD Positions (Virtual-Money Account) Reload
Bet Details Purchase
Price Sell
Bet Sale Price
One Touch: Win USD2500 if, at any time before the close of trading on 17-MAY-07 [inclusive], S&P500 Index touches 1530. details triggers orders SELL this bet if: S&P500 Index hits or low trigger range: (1174, 1467.17)
high trigger range: (1474.35, 1769)


Limit loss price : USD suggested range: (213.4, 424.66)
Take profit price : USD suggested range: (428.93, 2487.5)

USD 535.4
USD 426.8



NOW, I SELL 10 1320/1330 BEAR CALL SPREAD ON SPX FOR $0.75. IS THIS BETTER HEDGE NOW THAN SPY CALLS?.
 
Quote from ThunderChicken:

USD Positions (Virtual-Money Account) Reload
Bet Details Purchase
Price Sell
Bet Sale Price
One Touch: Win USD2500 if, at any time before the close of trading on 17-MAY-07 [inclusive], S&P500 Index touches 1530. details triggers orders SELL this bet if: S&P500 Index hits or low trigger range: (1174, 1467.17)
high trigger range: (1474.35, 1769)


Limit loss price : USD suggested range: (213.4, 424.66)
Take profit price : USD suggested range: (428.93, 2487.5)

USD 535.4
USD 426.8



NOW, I SELL 10 1320/1330 BEAR CALL SPREAD ON SPX FOR $0.75. IS THIS BETTER HEDGE NOW THAN SPY CALLS?.
More...

Better to buy upside puts via the downside no touch strikes and hedge with short call spreads in vanilla options. There is edge via increased payout for taking skew.
 
Quote from atticus:

Better to buy upside puts via the downside no touch strikes and hedge with short call spreads in vanilla options. There is edge via increased payout for taking skew.
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Coach
what is your opinion?.

Thunder Chicken:confused:
 
I'll kick off the "burned by the set" posts... NDX set (nds) +25 over yesterdays close. Turned my $4k profit into a $100 loss because I was cheap and wanted the last couple of bucks out of the position. Live and learn.

Damon
 
I trade mostly ER2 options, so while I wasn't burned by SET exactly, I was still highly discomfited by the 10 point gap up. I had short calls at 835, a smaller number of longs at 830, and other longs at 850 which are irrelevant this close to expiry. So when the market gapped open to 830 and moved up to 834, I was not enthused. I had some long futures earlier this week to hedge the move up Monday, but I closed those during the midweek decline.

Thanks to the fade after the open, I closed out everything with minimal extra damage.

This was another difficult month for me. The Feb plunge gave me a 2% loss for March, and the subsequent 10% surge from the bottom will leave me about breakeven for April. Not that I'm complaining. A 10% market move in 4 weeks (or 1 week in Feb) is hardly ideal for short option trades. If I can keep a lid on risk and come through those months with b/e or a small loss, I am quite pleased. I know the register will continue ringing soon :)

In the meantime, at least IB gets to make some money. Where's the info on that IPO?!? :D
 
Quote from jeffm:

I trade mostly ER2 options, so while I wasn't burned by SET exactly, I was still highly discomfited by the 10 point gap up. I had short calls at 835, a smaller number of longs at 830, and other longs at 850 which are irrelevant this close to expiry. So when the market gapped open to 830 and moved up to 834, I was not enthused. I had some long futures earlier this week to hedge the move up Monday, but I closed those during the midweek decline.

Thanks to the fade after the open, I closed out everything with minimal extra damage.

This was another difficult month for me. The Feb plunge gave me a 2% loss for March, and the subsequent 10% surge from the bottom will leave me about breakeven for April. Not that I'm complaining. A 10% market move in 4 weeks (or 1 week in Feb) is hardly ideal for short option trades. If I can keep a lid on risk and come through those months with b/e or a small loss, I am quite pleased. I know the register will continue ringing soon :)

In the meantime, at least IB gets to make some money. Where's the info on that IPO?!? :D
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of course you get my attention when er2 options are mentioned!:D
i had some calls short @ 850 that i closed for about a .3 gain. with all this up move; are you looking at any puts for may?
 
are you looking at any puts for may?
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I added about 1/3 of my monthly size during the dip this week. It wasn't much of a dip, but that may be all we get if the market is back into the go-go mode of the fall. I have short may put spreads at 752 and 745 and will be happy to add more if we drop in the next couple of weeks. I also used some tight b/a spreads to create few cheap otm debit spreads for lottery insurance. For instance, I have some may 725/715 spreads for 0.10. If all goes well, I will never make money on those trades. If all goes to sh1t, I will be glad I had them :)

I also have a very small short call spread for may and will be reluctant to add any more. If we do get a drop at some point, I will buy june calls and leg into the spread on the subsequent rise.
I might also look into May/Jun diagonals, but I want to wait until Monday when I will have a clearer picture of my margin.
 
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