QQQQs fell all of a sudden from 45.55 to 45.22. It now around 4:15PM. Anything went wrong? I guess it is some earnings from some tech company.
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SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
OK, opened my TOS account, so now the questions are going to get really dumb!
For fun, I put in two orders, one for bull put spread NDX sept 1650/1675 and one for the bear call ndx sept 1950/1975
This was done without even looking at the market, just to play with how the thing works and how adjustments can be made.
If you put in the price at market for the day, when do you find out if they were filled? Do you always put your orders in at market? or specify a price? What is a limit order?
Thanks Michael
For fun, I put in two orders, one for bull put spread NDX sept 1650/1675 and one for the bear call ndx sept 1950/1975
This was done without even looking at the market, just to play with how the thing works and how adjustments can be made.
If you put in the price at market for the day, when do you find out if they were filled? Do you always put your orders in at market? or specify a price? What is a limit order?
Thanks Michael
Michael:
Congratulations! I assume it is a paper trading account. If it is live account nothing I write in here should be used/attempted/etc. Do not make the mistake to make a live trade until you fully understand the risks. Your capital is a critical asset.
Now the easy stuff: Never make a market order. Reason: you will be eaten by the bid/ask spread alligator. It is always a limit order. Once you become comfortable you would try legging in.
If you confirm that it is a paper trading account, I can suggest few things. And calm down a bit with regard to adjustments, because you seem to be over worried in terms of their frequency.
PS: I saw your email. I scanned the content, and will read it later. The trades are in the middle of a long text, so I have to focus on the core. The other text is not important.
Congratulations! I assume it is a paper trading account. If it is live account nothing I write in here should be used/attempted/etc. Do not make the mistake to make a live trade until you fully understand the risks. Your capital is a critical asset.
Now the easy stuff: Never make a market order. Reason: you will be eaten by the bid/ask spread alligator. It is always a limit order. Once you become comfortable you would try legging in.
If you confirm that it is a paper trading account, I can suggest few things. And calm down a bit with regard to adjustments, because you seem to be over worried in terms of their frequency.
PS: I saw your email. I scanned the content, and will read it later. The trades are in the middle of a long text, so I have to focus on the core. The other text is not important.
I expected a drop this morning and got it. Didn't get filled at the OeX 510 strike yesterday for .10 cents, so bought shortly after the OPEN, this Thursday morning, the Vertical Bear Call Spread at OEX 505 for .10 cents, 50 contracts. Got filled. So we shall see what today and tomorrow brings.
Now I'm trying to figure out what happens to my SHORT STRADDLE, if anything at all.
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Your deviation thingy got me thinking. So on memo pad have put some new columns for the ASK price for each of the CALLS and PUTs, the OEX level and the TR and ATR.
See what that gives me for knowledge as we go along.
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Now I'm trying to figure out what happens to my SHORT STRADDLE, if anything at all.
**************************
Your deviation thingy got me thinking. So on memo pad have put some new columns for the ASK price for each of the CALLS and PUTs, the OEX level and the TR and ATR.
See what that gives me for knowledge as we go along.
***********************
Looks like the OEX 500 strike is the new overhead resistance line? I just might put on another Vertical Call Bear spread at 500/505 and follow this market down. Going to wait an hour as expiration is high today and the next correction is around noon. See what happens in the next hour. Looks like my 505 spread is okay pretty well? With now 3 strikes out, that is looking good for only two days left. Or day and a half until expiration.
Wow! That 500 strike Straddle tanked badly. A lesson there, not sure what it is? ( Thursday morning )
Trading Journal
Put on another Vertical Call Bear Spread at 500/505 and after a half hour and cancelling the first order at .25 cents, and placed another order and set it at a limit of .17 cents. Finally filled at .20 cents on a gyration of the market.
So I'm in with my account for this week for two Vertical Call Bear Spreads. First one at 510/515 for a net of +$340 and the second spread at 500/510 for a net of + $840.
Now all I have to pray for is that the market does not bounce back up 10 or 11 points before close on FRIDAY.
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The MEMO pad scratch paper overnight SHORT STRADDLE was a terrible failure. Crossed it out. The idea I had was the THETA decay might make it work. Scratch that idea, it did not work.
Put a second Memo Pad scratch paper SHORT STRADDLE this morning Thursday working another volatility ballooning, deflation trigger I'm watching. Using the OEX 490 STRIKE. Don't know yet how that will work out. We shall see in due course?
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Put on another Vertical Call Bear Spread at 500/505 and after a half hour and cancelling the first order at .25 cents, and placed another order and set it at a limit of .17 cents. Finally filled at .20 cents on a gyration of the market.
So I'm in with my account for this week for two Vertical Call Bear Spreads. First one at 510/515 for a net of +$340 and the second spread at 500/510 for a net of + $840.
Now all I have to pray for is that the market does not bounce back up 10 or 11 points before close on FRIDAY.
***********************
The MEMO pad scratch paper overnight SHORT STRADDLE was a terrible failure. Crossed it out. The idea I had was the THETA decay might make it work. Scratch that idea, it did not work.
Put a second Memo Pad scratch paper SHORT STRADDLE this morning Thursday working another volatility ballooning, deflation trigger I'm watching. Using the OEX 490 STRIKE. Don't know yet how that will work out. We shall see in due course?
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Quote from tradingjournals:
Just a quick one. At around 1:35PM, I noticed stalling in the upmove of the QQQQs, and I covered my short puts I sold earlier to play this upmove. QQQQ were 45.80 around 1:35PM, and I also noticed they did not fill me even when stock was rising. So I figured market markers were up to something, and I changed my order to hit their ask (because I was covering short puts).
What do you observed Falconview?
Other remarks: Bond market is at an important level. If it breaks the support, stocks may continue higher. If Bonds stall, I would expect stocks to mirror it as well. You now know that if bonds go up, stock market goes down. Bonds seem to say that if this happens today, it would be limit in the move.
Ten year bonds are at 125'22. They need to get to 125'17 to break support. It is 5/32 away. Low of the day (achieved last night) is 125'19.
It seems as if markets are looking among themselves to see who will brink first.
That was the top in stocks. Bond market blinked first. Gap of two days ago closed. I expect sideways tomorrow.
Falconview: I will read your post later. My impression based at what I have seen so far from you is that you are good at direction. Why you do not sell calls to play down, and sell puts to play the up?
Stanford: If you are concerned about drops, one way is to sell a straddle, and use some of the proceeds to buy insurance to cover for your put spread which is part of the candor, and also to cover the short put of the straddle you would be selling. You need to go way out of the money to buy "cheap" insurance such as ( puts, credit bear put spreads). Since it is demo paper account, please with it to feel the behavior of options. Take note of volty, particularly for straddles.
Stanford and Trade Journal
Well I'm into the two Vertical Bear Call Spreads. Step laddering as the market dropped with horizontal resistance lines. If I get through tomorrow until expiration, should be good for $1180 into my account, to dig back out of the hole.
The overnight SHORT STRADDLE credit spread trying out TIME DECAY or THETA as a gain was a flop! That didn't work!
The second test SHORT STRADDLE credit spread today though worked out. This is a volatility play, or premium shrinkage. The gain by close of market was only .95 cents. Maybe it will improve tomorrow, we shall see? That would be $95 gross before commission on a 1 option memo pad paper trade. I did however, evolve a trade system and rules for this Volatililty play in the SHORT STRADDLE. Will need to do it a couple more times, to see we have it right under different circumstances. I got some basic price ranges to expect though, for both the BID selling side and the ASK buying back side. Could have been $1.05 at the close, gained gross.
The only question in my mind now, before I try this in TOS web based platform, is I can understand when you put the spread SELL limit order in, and it says BEST price, which I take it to mean greater. At least that is the way it works in the Vertical Credit Spread. But CLOSING OUT, or buying back at the ASK I am wonder when it says LIMIT and you put a limit order, you really want that price, or LESS, not larger as when you sell. So I'm curious if anybody has any experience with a straddle order and how that works on the BUY BACK side? I can find out the hard way by doing it, but hate to lose money in the account because that is not the way it is going to work in a SHORT STRADDLE Thinkorswim SHORT STRADDLE spread order.
Other than that I am still wondering what the margin will be for a SHORT STRADDLE?
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The two Vertical Spreads today took up $50,000 margin. Just to earn $1180 over 2 days.
*******************************
Well I'm into the two Vertical Bear Call Spreads. Step laddering as the market dropped with horizontal resistance lines. If I get through tomorrow until expiration, should be good for $1180 into my account, to dig back out of the hole.
The overnight SHORT STRADDLE credit spread trying out TIME DECAY or THETA as a gain was a flop! That didn't work!
The second test SHORT STRADDLE credit spread today though worked out. This is a volatility play, or premium shrinkage. The gain by close of market was only .95 cents. Maybe it will improve tomorrow, we shall see? That would be $95 gross before commission on a 1 option memo pad paper trade. I did however, evolve a trade system and rules for this Volatililty play in the SHORT STRADDLE. Will need to do it a couple more times, to see we have it right under different circumstances. I got some basic price ranges to expect though, for both the BID selling side and the ASK buying back side. Could have been $1.05 at the close, gained gross.
The only question in my mind now, before I try this in TOS web based platform, is I can understand when you put the spread SELL limit order in, and it says BEST price, which I take it to mean greater. At least that is the way it works in the Vertical Credit Spread. But CLOSING OUT, or buying back at the ASK I am wonder when it says LIMIT and you put a limit order, you really want that price, or LESS, not larger as when you sell. So I'm curious if anybody has any experience with a straddle order and how that works on the BUY BACK side? I can find out the hard way by doing it, but hate to lose money in the account because that is not the way it is going to work in a SHORT STRADDLE Thinkorswim SHORT STRADDLE spread order.
Other than that I am still wondering what the margin will be for a SHORT STRADDLE?
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The two Vertical Spreads today took up $50,000 margin. Just to earn $1180 over 2 days.
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