SPX Credit Spread Trader

Ok, people have reading issues so let me put it in CAPS:

I DO NOT WANT TO SOLICIT ANY BUSINESS HERE AT ELITETRADER OR AT MY YAHOO GROUPS.

I OFFER NO MENTORING OR TRAINING HERE.

IT IS A LOT OF WORK AND INSTEAD OF THANKING ME FOR WHAT I AM DOING, YOU KEEP DIGGING FOR AN ALTERIOR MOTIVE THAT JUST IS NOT THERE.

FINE IF YOU WANT TO BE SUSPICIOUS BUT IF I TELL YOU THE TRUTH, THAT SHOULD BE ENOUGH TO PUT YOUR SUSPICION TO REST.

IT DOES TAKE A LOT OF EFFORT TO KEEP THIS GOING WHILE TRADING AND CONDUCTING MY OTHER BUSINESS BUT I DO IT BECAUSE

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I TRULY ENJOY IT AND I LEARN AS MUCH FROM OTHERS AS I THEY HOPEFULLY LEARN FROM ME.

NOW ALL OF YOU WHO SIMPLY WANT TO INTERRUPT WITHOUT ANY USEFUL INPUT, PLEASE LEAVE AND LET US GET BACK TO THE DISCUSSIONS AT HAND.

Thank you!
 
MAV:

you are just digging a bigger hole for yourself. Yes I wrote a book but the book has nothing to do with this strategy and you yourself did not even KNOW I wrote a book. So you proved nothing there. Also, sorry to bust your bubble again but I make hardly nothing from the book and whatever I do make I have to split with my co-author. Also I spent 6 months of my life writing the book (just ask my wife how many family events I missed due to my deadline). That was my choice so I do not regret it because I enjoyed the process and feel the topic is helpful to many people. What have you done?

Also I do have a fund but I am not raising any money in the United States whatsoever. We deal with institutional money overseas. I have individuals PM me occasionally about managing money and I turn them down. Does that sound like someone raising money? I turn down people. Also notice the hedge fund question I let go unasnwered. I do not want any individuals or U.S. clients. No offense to them. Why is it that simple English is lost on you?

Also, I never said I did coaching so now you are lying about me.

Mav, quit while you are ahead. No one understands why you need to interrupt this thread with useless attacks and lies about me.

If you are a cynic and mistrust everyone than fine. I was rasied differently


Quote from Maverick74:

I won't speak for riskarb, but I haven't mentored a soul in my life. Sure, point me to a thread where I mention any mentoring. This should be fun. I'm not tag teaming with anybody. I simply stated some simple facts about coach's strategy and then stated my belief that he is hocking his services on ET. I was kind of half kidding that he wrote a book and had a fund and coached people. I damn near hit the floor laughing when he actually posted that he indeed does have a book out, a fund he is running and that he does coaching. LOL. Talk about irony. Wow. :D
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I have profound issues with your methodology...

The wide IC is a horrible trade, that's all I am stating here. You mention hedging with flies, rolling into risk, etc... which I believe to be an absurd way to trade. I do understand, however, that you are hamstrung with these positions... there is no functional method by which to manage risk. Any large discontinuity in futures and you eat the entire debit-risk. You can't polish a turd.
 
Quote from Samson77:

....let's move on with the journal?
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Ok guys, points and counter-points have been made, appreciate that you did it with a minimal of name-calling. But let's get on with the journal, please.
 
Jet, we're lucky to have your input on this thread. And thank you for not taking a condescending tone given that most of us are retail traders and you have floor trader experience.

At the end of the day, the type of trading you've described is completely irrelevant to the retail trader (average of a 20k account, no interest in trading for a living, have a separate career that needs attention, not backed up by analysts/professional,...).


Quote from JET_DRIVER:

Well come on now....The Options Bully is not a fool, he just enjoys his greeks. We all need to enjoy what works for us! He just needs to lighten up on his agressive tone towards others.

I was a floor trader for nearly 6 years (CBOE and CME) before moving upstairs. I still use all my floor trading knowledge (greeks, skew knowledge, ect), but to a lesser extent. Trading upstairs is a different type of trading. Many guys have a hard time making the transition.

As far as the term "edge" that refers to theoretical edge and this is something for floor traders. Some upstairs traders can trade the same way, but they are usually trading in 250 lots or greater.

Heres how it works: Each floor trader has option value sheets and everybodys sheets can vary based on the IV they use. Say my sheets value an option worth 2.00. I make a bid of 1.80 and an offer of 2.20. I will buy the bid or sell the offer. By using futures (or stock) I will try to remain delta neutral while managing gamma, theta, and vega risks. If I can do this effectively I will hopefully capture this edge when I unwind the trade. The whole key to making money on the floor is volume and execution. Get that edge on 750 contract a day and you can make a living. As a floor trader you manage your whole position and use each trade as a building block to the entire position-like a mathimatical puzzle. On the floor I tried to move my positions into b-flys. That seemed to work well for me......
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There's a video on the CBOE website by Dan Sheridan -- he says the best times to get filled are 9:45am-10:30am and 2:30pm-2:45pm CST.

Quote from rdemyan:

Jet:

I hope you will be a regular contributor to this forum on credit spreads. Your experience and knowledge would be an asset to us all.

For example, we have a lot of posts on trying to negotiate better fills on our SPX spreads. Any advice on how we might do that? Is it even possible? One trader told me to place trades after the MMs have their "liquid lunch" because they might be in a more giving mood. I didn't believe him, but I'll take any "edge" I can get. LOL
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Quote from Magna:

Ok guys, points and counter-points have been made, appreciate that you did it with a minimal of name-calling. But let's get on with the journal, please.
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Moderator,

Thanks for stepping in. Hopefully we can get this journal back on track.

To all you people who are against this strategy that's fine. However, those of us who are for this strategy are many. Should we get hurt w/ this strategy that's the risks we're taking but please let us move forward w/o you're continued interference.

Thank you for respecting the Moderators request & allowing this journal to get back on track.

Coach,

Thank you for all of your help. Please don't let the few negative respondents affect how you handle your journal going forward. Myself, along w/ a number of other investors have appreciated all of your input & would appreciate you continuing w/ your journal. No need to let these little disturbances ruin it for the rest of us. Please let's keep going w/ the journal.

Thank you,
traderanonymous
 
There certainly isn't a need for personal attacks here. This is an interesting journal. Let's let it continue.

I too, don't like the strategy. Way back I posted the expiration-to-expiration moves of the SPX over the last few years. It's easy to see that, if you were somehow not able to close your positions, catastrophic losses would result. It's happened before. It'll happen again...

The risk/reward on each trade is horrible. If you feel you can always mitigate these risks, fine. But don't forget that the negative side of that risk curve IS REAL. And if you don't graph out each position, DO IT!

If I don't like the strategy, why am I here? I like trading. I like to learn, so I read everything. That said, I don't care how you guys trade. I may take the opposite side. I may go with you on a trade or two. I don't want anybody to lose at trading, but it has to happen.

Be careful. Trade smart. Know when you are in over your head.

Good luck to all.

C
 
I just noticed that these strikes were added except for 1120. Just as a followup, did anyone notice if these were added yesterday? I was traveling and couldn't followup.



Quote from rdemyan:

I just called the OIC and requested that the following strikes be added for November:

1120
1115
1110


I was informed that if they are added, it probably wouldn't occur until Monday.

We'll see, but thanks for the information.
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