SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
ATM straddles are quite expensive and 1 straddle per 3-4 spreads would be like 30 - 35 straddles given the number of spreads I do. Too much money I think to be worth it. Also I usually only worried about hedging in one direction when I consider it so I would rather hedge in that direction than using a straddle.
Phil
Phil
For a good intro in how to use TICK for intraday trading, look at this article from SFO Magazine:
http://www.smartmoney.com/options/index.cfm?story=sfo-music
http://www.smartmoney.com/options/index.cfm?story=sfo-music
Your are correct . I mispoke. What I meant was since you are worried about protecting the sold vertical, it might be simpler to buy 1 single call or put to protect the bad side. Cottle calls it a slingshot, some call it pregnant fly. So if u were in trouble on the put side you'd buy an ATM put for every 3-4 spread u sold. It then wouldturn out to be a pregnant fly on the downside. So if you are worried about the 1185/1180 put spread in Emini since you sold 20 of them, you'd buy 5 1190's ,Your pnl profile would be like a pregnant fly. Simple as that.
You might even make more than just capping your losses.
You might even make more than just capping your losses.
Well I had to read that about 5 times before I think I got it. I think I got it lol. I might be doing something similar to an extent when I add the SPYs but they are on a different scale from the SPX. But maybe I have something similar now in that I have the 1175/1165 Spreads and I bought the 1190/1180 put spreads as a partial hedge. But even so buying ATM puts for every 3-4 spreads would be SOOO expensive.
I am not sure about the pregnant FLY since the short and long strikes in the initial short spread are the same number and I would be just adding some long puts at a higher strike. But also I am limited to how many puts I can buy in this example since I do not want to eat up my premium just yet.
Bottom line, whatever works I guess.
I am sure there are an infinite ways to use SPYs SPX or other S&P products to try and hedge adverse moves.
Phil
I am not sure about the pregnant FLY since the short and long strikes in the initial short spread are the same number and I would be just adding some long puts at a higher strike. But also I am limited to how many puts I can buy in this example since I do not want to eat up my premium just yet.
Bottom line, whatever works I guess.
I am sure there are an infinite ways to use SPYs SPX or other S&P products to try and hedge adverse moves.
Phil
You must have been fighting me to get that filled. I had the exact same order, but here's the strange part.
I had the order in for a $0.35 credit for well over an hour. The SPX was up about 3 to 3.5. I then changed it to $0.30 and got filled in 2 minutes. SPX was still up between 3 to 3.5. I didn't really look carefully at the fill until I put it in my log. I realized I actually got filled at $0.35??!
Looking at the OX trade screen, it clearly shows that my original $0.35 order was cancelled and the fill at $0.35 was for the order placed for a $0.30 credit.
I am glad, but I'd prefer consistency because I know that I lose a lot more than I win on getting good fills.
I had the order in for a $0.35 credit for well over an hour. The SPX was up about 3 to 3.5. I then changed it to $0.30 and got filled in 2 minutes. SPX was still up between 3 to 3.5. I didn't really look carefully at the fill until I put it in my log. I realized I actually got filled at $0.35??!
Looking at the OX trade screen, it clearly shows that my original $0.35 order was cancelled and the fill at $0.35 was for the order placed for a $0.30 credit.
I am glad, but I'd prefer consistency because I know that I lose a lot more than I win on getting good fills.
Followup to my post below.
A couple of days ago I closed out the 1285 short leg on my Oct SPX 1285/1300 bear call spread. I was able to buy that leg back for $0.05. After the fill I placed a GTC order to sell the 1300 leg for $0.05, hoping to get lucky. Got it filled today. So I was able to close out the entire bear call for only the low OX commission. That allowed me to place the spread posted below and I got a better than expected fill.
Maybe some MM feels guilty about all the money they took from me in July.
A couple of days ago I closed out the 1285 short leg on my Oct SPX 1285/1300 bear call spread. I was able to buy that leg back for $0.05. After the fill I placed a GTC order to sell the 1300 leg for $0.05, hoping to get lucky. Got it filled today. So I was able to close out the entire bear call for only the low OX commission. That allowed me to place the spread posted below and I got a better than expected fill.
Maybe some MM feels guilty about all the money they took from me in July.
I would look at it more like this, you made all that money on the spread OFF of the market maker. Makes it taste sweeter even if it is not true....
Phil
Phil
Quote from rdemyan:
Followup to my post below.
A couple of days ago I closed out the 1285 short leg on my Oct SPX 1285/1300 bear call spread. I was able to buy that leg back for $0.05. After the fill I placed a GTC order to sell the 1300 leg for $0.05, hoping to get lucky. Got it filled today. So I was able to close out the entire bear call for only the low OX commission. That allowed me to place the spread posted below and I got a better than expected fill.
Maybe some MM feels guilty about all the money they took from me in July.
Got a fill on the OCT SPX 1240/1250 call spread at .3. I had to let the order sit for about 30 mins.
Optioncoach, when I posted earlier about that put spread that I was hoping to get for .45 I realize that price was unrealistic. I got it by taking the diff of the midpoint bid/asks and then subtracting .1. It looks like realistic pricing tends to be the different between the short bid and long ask, with maybe anohter .05 or .1 added. What are your thoughts on pricing? Thanks!
Optioncoach, when I posted earlier about that put spread that I was hoping to get for .45 I realize that price was unrealistic. I got it by taking the diff of the midpoint bid/asks and then subtracting .1. It looks like realistic pricing tends to be the different between the short bid and long ask, with maybe anohter .05 or .1 added. What are your thoughts on pricing? Thanks!