SPX Credit Spread Trader

Quote from wilburbear:

Arbitrage in the options markets is a limited game. The U.S. options markets are among the first in the world to try to figure out how to eliminate arbitage, and therefore this form of price competition between them. All U.S. options exchanges trade the same options and all these options are fungible between exchanges. And, there's pprobably not a single academic paper which describes arbitrage as unhealthy. So arbitrageurs, with those lightning fills at the click of the mouse button rule the roost, right? Not so fast. The exchanges turned off the instant fills in arbitrage situations, and promised a "manual" fill in the pit. Only the fills never come, and the orders are merely discarded! All you guys at a national exchange should take a lesson, and copy what has been done here. Competition can be eliminated, even if it might be illegal to do so. Not filling disseminated quotes is against the SEC Firm Quote Rule, but you may forget, all these exchanges are Self-Regulatory Organizations (SRO's as they are called). Option-floor based SRO's do not list violations for price-fading to traders, even though these fades have flown like water through a fire house for at least 5 years! The SEC has also been managed out of existance. The SEC certainly knows about these issues (SEC report below), but the SEC now meets, and talks with the exchanges, arbitrageurs need not apply! Period. End of story.

There is a lawsuit about this called Last Atlantis Capital v. Chicago Board Options Exchange (CBOE), or something similar, but part of it's been thrown out. How to profit? Become a remote market-maker. It's becoming easier (and maybe cheaper). You can trade from your home. All option exchanges now have these programs. It's much easier being the "house". You can also bust trades you don't like, after you've actually traded them. In today's environment you've gotta go with being the "house", especially when you can move your regulator to the sidelines.

http://www.thememoryhole.org/corp/finance/sec_amex_report.htm
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Any update on this case before Elaine Bucklo in Chicago? The exchanges and specialists were going to walk away from millions of trading violations handed to RAES bandits.

What clearer case can there be for becoming a market-maker? You can do anything you want to public customers. Public traders aren't allowed to win in the options markets even when the professionals break the rules! Surely, you'll find that significant when deciding to be a broker-dealer, or a public customer.

"Become the hunter, not the hunted".
 
FYI, the settlement values for SPX, OEX, DJX, RUT and NDX can be found on the CBOE website... link below. And they are not defined by the index itself, but by another index.

For instance, the RUT idx settlement price on the 3rd Fri is based on the RSL value... i..e. RUT Flex Opening Exercise Settlement Idx.

And this is not explained anywhere very clearly... it took me years to find out this info... by chance... in an options trader article a couple of months ago. Give a look at the values of SPX and RUT on the first hour of Fri exp and the settlement values to see the differences.

www.cboe.com/data/Settlement.aspx

Good trading,

IT
 
I know I'm drubbing up an very old thread here but have just skimmed through most of it and was wondering why it went cold? Found it to be quite informative and picked up alot of useful info from many posters that don't seem to post anymore:confused:
 
I am on Bear Call Spread (1070/1080) on SPX. It is very scary now as SPX moves higher everyday. Anyone have any alert notification system or website when a stock or index moves to a particular value, it should automatically send me an email to put a sell order?

Thanks
 
Quote from falcon:

I know I'm drubbing up an very old thread here but have just skimmed through most of it and was wondering why it went cold? Found it to be quite informative and picked up alot of useful info from many posters that don't seem to post anymore:confused:
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The thread got a little long to keep up but mainly the volatility environment changed I stated somewhere in there that it was no longer the best scenerio to sell credit spreads in my humble opinion. So I shifted away from the strategy.
 
Quote from vsusi:

I am on Bear Call Spread (1070/1080) on SPX. It is very scary now as SPX moves higher everyday. Anyone have any alert notification system or website when a stock or index moves to a particular value, it should automatically send me an email to put a sell order?

Thanks
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What was your entry price? What is your exit if sp keeps on trucking?

www.FreeStockCharts.com is a great site, and allows price alerts.

There is also a new site which issues free trading signals via text: www.GoTradeSignals.com
 
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