SPX Credit Spread Trader

Chris:

Yeah day jobs get in the way with trading too much lol. Starting next week I will be archiving the show and will let people know where they can get at it.

Chris, since you are the expert in archiving recorded shows I may require your expert advice ;)

Phil


Quote from clslaw:

I missed your radio show due to that day job thing... :mad:

An archive or "pod cast" would a great idea.

Chris
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Hootie:

I believe OX does have an all or none button when you are placing an order. Look at the order screen when you are putting in number of contracts and the limit price, I have seen it there before. If not, then go to OX live help.

I have also got burned like that. I had an order for like 75 spreads and the MM filled 4 of them! I had to adjust the price to get the rest filled. bastards lol.

Phil

Quote from pyhootie:

I put in an order yesterday thru OX for a 1260/1270 spread - 10 contracts @ a credit of .45
There is no place on the order screen for an all or nothing order, well I was filled for 2 contracts, which will barely cover the commissions.

Question - Is there anyway (other than phone call) to express it's an all or nothing order?

Thanks
Hootie
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The relatively low volumes we have seen lately makes it hard to tell if the recent run up is going to have legs or not. I agree, 1245 looks like a strong resistance point and I am rooting for the technical traders to start shorting if we get there!

I set my "warning" level at 15 points from my short strike to give me time to evaluate the available adjustments as SPX tends not to make sharp moves like stocks. There are many things to look at: strength of move, time to expiration, current profit/loss on position, etc. Right now I'm with you, hold on and let time decay work its increasing magic going into the last few days.

ryan


Quote from optioncoach:

Ryan:

With 1245 as strong overhead resistance I also did not take any action with my 1250/1260 spreads. I expect that those levles will not be reached this week at all. On Monday, we will see what is in store for the week. Do not forget that when the market hits 1245 all those tecnical traders will come in and short the market and help us out lol ;).

If the index is close to your short strike and you have a small profit, nothing wrong with just taking that profit and removing all worry and risk completely.

Phil
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Phil

I used the live help on OX and was told that I could call in an order for all or none, but that there wasn't a check button on the spread order ticket. I was told that this would make my order harder to fill. Anyway, to make a long story short, I requested that a all or none button be put on the spread order ticket.

Hootie
 
Phil,

When its so close to expiration each day's theta decay is significant. How does theta decay accrue on our positions. I think it only accrues during market hours and not after-hours and not on weekends? Say a large iron condor has a current theta of -$1000. Does that $1000 get "registered" in a lumpsome at the close of the market or does it get chopped up into 5-minute bits or ....?
 
Theta is a theoretical value really and is taken into account when market makers price the options minute by minute. If all things were held constant then each day the option value would change by that day's theta. But things are never constant. The index is moving, volaitlity could be changing, market expectations could be changing, supply and demand and liquidity could be changing, etc..

So you will never "see" the time decay value being deducted. It is a factor in pricing the options and each day as expiration approaches time decay because a more important factor and reduces the prmeium. It is not really like a deduction where at the end of the day you simply reduce the optiopn premium by theta.

Time decay is out there each day and theta is a theoretical way to measure it in a snapshot holding all things constant, but you will not visually see time decay occurring. Just know that if you are 20 points OTM and the index is moving away from you, the premiums will drop because delta and theta are both working for you in the short options.

Phil

Quote from andysmith:

Phil,

When its so close to expiration each day's theta decay is significant. How does theta decay accrue on our positions. I think it only accrues during market hours and not after-hours and not on weekends? Say a large iron condor has a current theta of -$1000. Does that $1000 get "registered" in a lumpsome at the close of the market or does it get chopped up into 5-minute bits or ....?
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Phil,

I've been exploring something interesting and wondered if you have considered this as well.

Instead of ICs with 30 or 45 days to expiration, how about 90 to 100 days to expiration? The strikes can be further OTM because of the higher premium. And you can put one on each month. After 3 months, you will have an IC expiring each month...
 
There really is no significant time decay going that far out so no real benefit. When selling credit spreads you want to make time decay work for you. The only reason to go further out in time is to chase more credit and that means taking on more risk. I am fine with my monthly returns and I already have an IC expiring each month ;).

Do not try and chase those pots of gold because a lot of risk lurks behind them. Slow and steady.... Nickles and Dimes a Thousand Times.

Phil

Quote from andysmith:

Phil,

I've been exploring something interesting and wondered if you have considered this as well.

Instead of ICs with 30 or 45 days to expiration, how about 90 to 100 days to expiration? The strikes can be further OTM because of the higher premium. And you can put one on each month. After 3 months, you will have an IC expiring each month...
More...
 
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