SPX Credit Spread Trader

Peering into my Magic 8-Ball now........ wait for it..... here it is.....

ASK AGAIN


CRAP! Piece of shit, I got to get rid of that thing.


Quote from ryank:

I would prefer to know the SET before Friday!

ryan
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Thanks for the answer. Let's say I'm not decent at picking tops and bottoms at all (which is true). I plan to go by statisticcal approach and wait for big abnormal move to
put on bull put or bear call spread ATM.

If the indexed move down fast and move up fast, I could end up with Iron Condor with no directional bet.

Suppose, when the index move one way than the statistical norm, beside putting spread against it which is directional bet, what else could I do to have non-directional bet ?

-Nick

Quote from Maverick74:

Sure,

Depending on the type of trader you are, if you like to swing trade the tops and bottoms, you could sell ITM credit spreads. You can often take in 7 to 8 pt credits. Yes, 7 to 8 pts, not .70 to .80, in return for only 2 to 3 pts of risk. Much better risk to reward.

Of course you are trading hard deltas and need the index to move back up. But if you are decent at picking tops and bottoms, it's a much safer way then doing what a lot of people do which is selling naked puts or getting long the underlying outright. This allows you to make a bet with very limited risk, risk that you don't need to hedge, re-hedge, and hedge again. The upside is sweet. No greeks to worry about. And the credits are huge.

Keep in mind, this is strictly a directional bet. But it allows you to not have to worry about putting out fires when the shit hits the fan.
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Phil/Nick/...

How close is SPX to your to your short strikes? Are you going to hold till expiration? I think that has quite a bit of risk given that sometimes the market close on Thursday can be 20 point away from SET?
 
Andy:

I often have that concern too (esp. after the June 2005 expiration) and have always been able to buy the short strike back for $0.05 on Thursday of opex week during the last hour or two of trading (assuming of course that it is not in the money).

Why take the risk when it only costs $0.05 to get out, if you're concerned.

Quote from andysmith:

Phil/Nick/...

How close is SPX to your to your short strikes? Are you going to hold till expiration? I think that has quite a bit of risk given that sometimes the market close on Thursday can be 20 point away from SET?
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Quote from andysmith:


How close is SPX to your to your short strikes? Are you going to hold till expiration? I think that has quite a bit of risk given that sometimes the market close on Thursday can be 20 point away from SET?

Are you still short the 1200 Calls? What are YOU planning to do?
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Do not forget that JUNE 2005 was a withcing day. Same thing we had in Sept. I am not concerned for Friday unless some major news comes out, of course it will be too late then LOL.

I have the short 1165 on the SPX and the short 540 on the XEO and will not touch them as of now. I also have the short 555 on the XEO from a rolled down call spread and I closed the 1220 short SPX call today to look to roll down as well on the bump today.

Should close fine today and tomorrow the way things are going now.

Quote from andysmith:

Phil/Nick/...

How close is SPX to your to your short strikes? Are you going to hold till expiration? I think that has quite a bit of risk given that sometimes the market close on Thursday can be 20 point away from SET?
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rdemyan,

When you have bought back for 0.05 close to the close of market on Thursday, how close was the SPX to the short strike?



Quote from rdemyan:

Andy:

I often have that concern too (esp. after the June 2005 expiration) and have always been able to buy the short strike back for $0.05 on Thursday of opex week during the last hour or two of trading (assuming of course that it is not in the money).

Why take the risk when it only costs $0.05 to get out, if you're concerned.
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Yep, still short the 1200 strikes. Got in for $1.10, can get out for $0.40 now.... assuming greed has not gotten a hold of me. I was much more worried about the 1165.....



Quote from nlslax:

Quote from andysmith:

Are you still short the 1200 Calls? What are YOU planning to do?
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I have couple of contracts on the short side of 1165, 1160, 1155, 1140 for Oct. For nov, I have 1160, 1150 and some spy put credit spread opened ATM 116/118, 117/119.

Quote from andysmith:

Phil/Nick/...

How close is SPX to your to your short strikes? Are you going to hold till expiration? I think that has quite a bit of risk given that sometimes the market close on Thursday can be 20 point away from SET?
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Wow... maybe it is easier to ask you which strikes are you NOT short lol. I assume that you will be BANK in Oct then...? lol

Quote from skanan:

I have couple of contracts on the short side of 1165, 1160, 1155, 1140 for Oct. For nov, I have 1160, 1150 and some spy put credit spread opened ATM 116/118, 117/119.
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