The strategy is far from crowded. Lumping all the premium sellers together as if we are sitting around running the same contracts all the time is like saying all day traders are doing the exact same thing. Just because the specific strategies have not been shared down to the last trade, don't assume that they are doing anywhere near the same things.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Also, many institutions are net buyers of OTM puts for heding purposes so there is a very liquid market with respect to SPX front month options. With so many strikes to choose from and so many ways to play it I do not think it is crowded either.
I know of two hedge funds doing the same type of strategies in parts of their portfolios and we have yet to choose the same strikes. Each person or fund has their own risk management approach and that is what truly makes one profitable.
I also use OEX and XEO from time to time and will be using options on futures as well so that I always have choices of different products and strikes.
Regards,
Phil
I know of two hedge funds doing the same type of strategies in parts of their portfolios and we have yet to choose the same strikes. Each person or fund has their own risk management approach and that is what truly makes one profitable.
I also use OEX and XEO from time to time and will be using options on futures as well so that I always have choices of different products and strikes.
Regards,
Phil
Quote from Dr. Zhivodka:
There's a very simple solution to low Vol and negative Vega.
I agree. And Im not really in the mood to argue with the others about their market religion. And I have traded the spreads game et al since 1997, but I just dont feel that a market that widens its spreads as vol drops to historic lows is such a great gig anymore. So that is my final comment.
Senor Zen
No arguments needed cause there is nothing to argue about. It is futile in that sense to say a strategy is not worth it. I am making money with this strategy and I like the profile. It is not for everyone nor would I want to convince everyone to do it. If the parameters no longe make it worthwhile to you then you have obviously moved on to another strategy more appropriate for your trading style.
What would you have to argue about anyway. If you do not see the benefit of doing these spreads then you are certainly free to not do them. But it would not make sense to try and convince others to think as you do.
This thread is for those who are interested in OTM SPX spreads or IRON CONDORS.
Best of luck to you.
Phil
What would you have to argue about anyway. If you do not see the benefit of doing these spreads then you are certainly free to not do them. But it would not make sense to try and convince others to think as you do.
This thread is for those who are interested in OTM SPX spreads or IRON CONDORS.
Best of luck to you.
Phil
I always find it amazing that most threads here (if not all) deteriorate into something along the line of "fuck you, you don't know shit."
I agree with Option Coach. I don't understand why anyone would want argue about this thread. It's a rare good one. He is to be commended for starting and maintaining this discussion.
I've been trading option spreads since 90-91. In my opinion, with the advent of more products and electronic execution and VERY hungry MM's and DPM's, there's never been a greater time to trade these instruments.
With regard to your "widen its spreads as vol drops...." comment. Consider the possibility that you're trading the wrong products.
Anytime an exchange has proprietary products such as the SPX, or OEX/XEO, or DJX etc...its spread is gonna suck due to the lack of competition amongst exchanges. That's not say that I don't trade these, I do.
However, in the case that a product develops an extraordinarily large execution component of transaction cost...one simply moves on to a product that has competition...(i.e. is traded on multiple exchanges).
As for religion.....mine is, in most cases Delta neutral, Theta and Vega positive. Condors/Wingspreads have 2 out of 3 of those.
Best Regards,
Quote from Dr. Zhivodka:
I always find it amazing that most threads here (if not all) deteriorate into something along the line of "fuck you, you don't know shit."
I agree with Option Coach. I don't understand why anyone would want argue about this thread. It's a rare good one. He is to be commended for starting and maintaining this discussion.
I've been trading option spreads since 90-91. In my opinion, with the advent of more products and electronic execution and VERY hungry MM's and DPM's, there's never been a greater time to trade these instruments.
With regard to your "widen its spreads as vol drops...." comment. Consider the possibility that you're trading the wrong products.
Anytime an exchange has proprietary products such as the SPX, or OEX/XEO, or DJX etc...its spread is gonna suck due to the lack of competition amongst exchanges. That's not say that I don't trade these, I do.
However, in the case that a product develops an extraordinarily large execution component of transaction cost...one simply moves on to a product that has competition...(i.e. is traded on multiple exchanges).
As for religion.....mine is, in most cases Delta neutral, Theta and Vega positive. Condors/Wingspreads have 2 out of 3 of those.
Best Regards,
Zhivodka:
Notice I was referring to SPX, OEX, XEO, hence my comments. Not trying to sabotage this thread, but sometimes the devil is in the details as we all know. I tried to walk away from the thread and perhaps it was not done gracefully.
At the moment I sell deep out of the money naked put options on YM, ER2, Z. DAX
I would like to move to credit dpreads and I am reading this thread with much interest. May I ask?
1. Which are the index products more efficient for credit spreads?
2. I have about 50k with IB. Will this be enough to trade credit spreads?How many contracts can I trade?
3 Will the margin required be 15% of the net spread?
Thanks so much
I would like to move to credit dpreads and I am reading this thread with much interest. May I ask?
1. Which are the index products more efficient for credit spreads?
2. I have about 50k with IB. Will this be enough to trade credit spreads?How many contracts can I trade?
3 Will the margin required be 15% of the net spread?
Thanks so much