SPX Credit Spread Trader

Things look like they are more negative with 1190 not holding yesterday so i am more inclined to adjust my positions today. I will be out of the office on THU and in and out today (WED) so I do not want to be surprised. Bulls keep losing the fight to push back over 1190 and today's announcement about high heating fuel costs may keep downward pressure on.

I will be reviewing the strikes this morning and when the market opens I will be making some adjustment moves. Let the games begin...

Phil
 
S&P +4.58 to 1189.45....

Okay, now the market is just @#$%ing with me...lol.

Gonna still look through the adjustments but not gonna pull the trigger yet as of 10:00 AM.

Phil
 
I was thinking the same thing! I was watching the futures this morning and I was sure the market would run under 1180 at the open and I would make some adjustmens. The market knows I have to run out of the office for about 45 minutes and will wait until I leave before running lower lol!

ryan


Quote from optioncoach:

S&P +4.58 to 1189.45....

Okay, now the market is just @#$%ing with me...lol.

Gonna still look through the adjustments but not gonna pull the trigger yet as of 10:00 AM.

Phil
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Dear Optioncoach

Can one use calendar spread strategy for 100% protection.e.g I sell dec 1075 put at 4.1 and buy nov 1075 put at 2.4 giving me a net credit of 1,70

following month I roll it forward Jan/Dec. and so on.

Can this work? Do people use this strategy. What are the drawbacks?

Please comment
 
Quote from gatorplease:

Phil,
Where are you considering adjusting to? Very volatile here.
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LOL. Yes, up and down like a tart's knickers. Could've taken advantage of the upswing to cover your short puts for a little profit and then when it "inevitably" swings down in the afternoon (grrr...) take some profit on the remaining long leg - but depends on width of spread.

The intraday V bottoms in the last few days indicates that there is some big money that doesn't want SPX to fall below 1182 - he/she must be long a gazillion futures lol.

Momoney.
 
With the amount of time to expiration are you going to take another stab at a bull put spread Phil?

Quote from optioncoach:

I am adjusting as we speak, give me some time to get my orders filled. I am not gonna play around with this market anymore lol

Phil
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ADJUSTMENTS!

What a fun first hour or two of the day huh.... Well I will not have much time this afternoon to watch the market and will be out tomorrow so I wanted to make some adjustments today to protect myself.

My positions were:

-110 SPX OCT 1165/1175 Put Spreads @ $0.55
-110 SPX OCT 1240/1250 Call Spreads @ $0.30

1. Closed the SPX Call Spreads at $0.10 and collected $0.20

2. Sold lower strike SPX Call Spreads at 1220/1230 @ $0.25
I had an order at $0.35 but as time went on the MMs moved the bid ask spread little by little and I had to shave. $0.25 was as low as I was willing to go and luckily got filled.

3. Closed the SPX 1165/1175 Put Spreads at $2.40 and sold 1155/1165 Put Spreads at $1.40 for a net cost of $1.00. I wanted more room given what could happen if market dips below 1180 so went for a 10 point adjustment lower.

4. Have not touched the XEO position just yet since I was able to sell the call spreads with it for a nice premium earlier so I have more of a comfort level.

5. My partial hedges are in place and none of them had significant profit worth taking. Also they need to stay in place to help hedge should the market keep moving lower.

6. Since everything is still in place I will not net everything out for a tally. That is better done after expiration day. But bottom line I am taking a small loss on the SPX puts spreads to give me more room to the downside. AS I said before, I am willing to take a small loss in OCT and therefore want to protect my capital as much as possible. I would have liked more credit for the rolled down 1220/1230 SPX call spread but the MMs gave it to me royally. But at least I still gained a net $0.15.

Now that I have adjusted, I am sure the market will be poised to rally! lol.

Phil
 
Coach:

You made the adjustment, but I'm wondering, is there a technical support level that makes you think the SPX won't go below 1165, now that it has breached 1180. The next support level below 1180 that the guys I follow talk about is around 1140.

If there isn't a support level between 1175 and 1165 that you are relying on, then would you just continue to adjust downward as necessary, losing more money every time. Would your plan be to continue to adjust downward as necessary probably in 5 point increments because we are so close to expiration?

Or what about just getting out of the position entirely (if you were planning to do that because you didn't think there was any support to help the adjustment, that decision might have been made sooner to lessen the loss?)

This all goes back to my July experience where adjusting was extremely difficult near expiration and I could only roll up about 5 points which didn't help a bit.

Thanks.
 
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