SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
It was not clear to me when the set for the spx weekely will be established...they only say am closing...does that mean last day to trade is Thurs?
I assume you are referring to SPX 1240/1250 call credit spread. 1240 seems safe given past resistance but we are entering a time when markets rally strongly. I cannot tell you what to do but I would be a litle nervous with a 1240 strike as my short and if I could get out even I might do it and re-assess the situation. Others have gone in on the 1240 strike but just personally I am wary of the upside potential.
Phil
Phil
For Nov. I have the following:
xeo
540/535 P ------ .90 credit
565/570 C ------ .90 credit
The 565 short has a probability of .20. That's more than 1 standard deviation away. Not sure if its far enough OTM.
Question:
What strikes up do you'll see resistance in xeo? 565 575 ...?
I also added as a hedge:
Dec 580 C for 1.10 debit
Chose this strike as I saw a high open interest . Also greater than 45 days to expiration - gives some time for a move up.
Also, MACD starting to cross over, stochastics turning up and we are trading at the very top (almost over) the top of the current channel.
xeo
540/535 P ------ .90 credit
565/570 C ------ .90 credit
The 565 short has a probability of .20. That's more than 1 standard deviation away. Not sure if its far enough OTM.
Question:
What strikes up do you'll see resistance in xeo? 565 575 ...?
I also added as a hedge:
Dec 580 C for 1.10 debit
Chose this strike as I saw a high open interest . Also greater than 45 days to expiration - gives some time for a move up.
Also, MACD starting to cross over, stochastics turning up and we are trading at the very top (almost over) the top of the current channel.
Coach,
With all the cautions being expressed about entering call credit spreads this cycle, would it make sense to expand this discussion to debit spreads on the SPX? I realize this is a credit spread thread, but flexibility should be part of the learning curve here, and making this switch at this time seems to be something the market is telling us to do. What do you think?
With all the cautions being expressed about entering call credit spreads this cycle, would it make sense to expand this discussion to debit spreads on the SPX? I realize this is a credit spread thread, but flexibility should be part of the learning curve here, and making this switch at this time seems to be something the market is telling us to do. What do you think?
Just wanted to post a futures trading experience I had the past two days which goes to the emotional element we have discussed. Yesterday I made about 3.5 points trading the E-mini S&P futures (ES). In the last 15 minutes of the market I gave it all back. Got pulled in by some greed and that desire to be in we discussed.
Well today by 12:00 noon I had made 4 points in the ES futures. I grabbed my "The New Stock Market Wizards" book, left my desk and went out for lunch to get away from the screen and the market and detach myself emtionall from the market. I am more relaxed and feel no need to jump in and possibly give it all back.
Sometimes detaching yourself from the market after a nice win OR a nice loss is the best way to clear your mind and keep the emotions in check. This is a very important element in trading that sometimes still catches me and taking a useful break (food/reading) might help you put things into perspective. In the past there are days where after trading the AM I simply shut off the computer. Not easy to do the first few times but after a while it is kind of empowering.
Addicts claim they can quit at any time and we know they are just fooling themselves. It is quite empowering on days when you have made some good trades and you can simply close the screen and quit for the day and enjoy your attention elsewhere. Even more useful and necessary is being able to do it after a bad loss. Unfortunately I have learned to do that lol. But the power to say "I am done for the day/week/month" gives you control over your trading and more confidence to manage your positions and risk.
Next time you have a ncie string of wins, try to just shut off the computer and walk away for a period of time and relax. It is amazing how sometimes it clears your brain. I have done that with losses sometimes and it is azmaing how you put them out of your mind so that your next trade is not negatively affected by that loss. After nice wins, like today in the futures, it is even more rewarding because I can give my mind a break. Also, I can use the time for more reading, studying or backtesting.
Phil
Well today by 12:00 noon I had made 4 points in the ES futures. I grabbed my "The New Stock Market Wizards" book, left my desk and went out for lunch to get away from the screen and the market and detach myself emtionall from the market. I am more relaxed and feel no need to jump in and possibly give it all back.
Sometimes detaching yourself from the market after a nice win OR a nice loss is the best way to clear your mind and keep the emotions in check. This is a very important element in trading that sometimes still catches me and taking a useful break (food/reading) might help you put things into perspective. In the past there are days where after trading the AM I simply shut off the computer. Not easy to do the first few times but after a while it is kind of empowering.
Addicts claim they can quit at any time and we know they are just fooling themselves. It is quite empowering on days when you have made some good trades and you can simply close the screen and quit for the day and enjoy your attention elsewhere. Even more useful and necessary is being able to do it after a bad loss. Unfortunately I have learned to do that lol. But the power to say "I am done for the day/week/month" gives you control over your trading and more confidence to manage your positions and risk.
Next time you have a ncie string of wins, try to just shut off the computer and walk away for a period of time and relax. It is amazing how sometimes it clears your brain. I have done that with losses sometimes and it is azmaing how you put them out of your mind so that your next trade is not negatively affected by that loss. After nice wins, like today in the futures, it is even more rewarding because I can give my mind a break. Also, I can use the time for more reading, studying or backtesting.
Phil
Although it may seem counterintuitive, the best lessons can be learned from wins. Most people advocate that after a loss you should review what transpired and try and learn from your mistakes. However, many times our brains are in a negative state from the loss and that combined with out egos sometimes prevents us from looking objectively at what occurred from lessons learned. We tend to discount the events as a one-time market move or unusual event as opposed to finding fault with our approach in the position. The negative feeling and the ego makes us look for the 3rd-party responsible for the loss instead of placing blame where it lies.
Now in your situation where you had a 19% gain shrink to a 4.5% gain cause the "Whew!" factor to kick in. You get that fear of almost blowing a great amount of profits and once you survive with the skin of your...profits, your mind is happy at the profits but sort of scared straight at how you almost lost it. You will tend to remember what happened and tell yourself that you learned a good lesson and never do that again. You will have a positive focus on the event and therefore be more willing to accept the error and almost vow never to do that again. The lesson learned is more positive than the one that could be learned from a loss. You are not looking for something other than yourself to blame. In fact, YOU ARE blaming yourself for almost giving all that money back to the market and therefore proactively remember the mistake made and work to never repeat it again.
The mind is a complex tool but the most important trading tool you have and the more you understand it in these situations, the more you can learn from both WINS, NEAR MISSES and LOSSES alike.
Phil
Now in your situation where you had a 19% gain shrink to a 4.5% gain cause the "Whew!" factor to kick in. You get that fear of almost blowing a great amount of profits and once you survive with the skin of your...profits, your mind is happy at the profits but sort of scared straight at how you almost lost it. You will tend to remember what happened and tell yourself that you learned a good lesson and never do that again. You will have a positive focus on the event and therefore be more willing to accept the error and almost vow never to do that again. The lesson learned is more positive than the one that could be learned from a loss. You are not looking for something other than yourself to blame. In fact, YOU ARE blaming yourself for almost giving all that money back to the market and therefore proactively remember the mistake made and work to never repeat it again.
The mind is a complex tool but the most important trading tool you have and the more you understand it in these situations, the more you can learn from both WINS, NEAR MISSES and LOSSES alike.
Phil
The discussion is certainly welcome. But just because I am concerned about a large rally does not mean I am certain enough of that rally to take the long position. My concerns are more that the premiums available are at strikes too low for my comfort level. However I am not fully convinced that we will definitely have a rally and therefore want to go long on OTM calls due to the benefits of the IV skew. So just keep that in mind that conecrn over an event that could negatively affect your position is not enough by itself to then take the oppositie position as a directional bet.
But I did look into long SPY and XSP call spreads to see if they were cheap enough to take such a bet. $0.10 and $0.15 bets for long spreads do not really start until 1245 or so and my concern for a move to there is not enough to make me go long just yet. Also if the market does move higher, IV will most likely stay flat or drop so I will not get hardly a boost from a jump higher unless it moves close enough to the long strike. IV will not be enough to bump the spread higher. So as of today I am not inclined to go long yet.
WIth a down day today I am still looking into NOV put spreads.
Phil
But I did look into long SPY and XSP call spreads to see if they were cheap enough to take such a bet. $0.10 and $0.15 bets for long spreads do not really start until 1245 or so and my concern for a move to there is not enough to make me go long just yet. Also if the market does move higher, IV will most likely stay flat or drop so I will not get hardly a boost from a jump higher unless it moves close enough to the long strike. IV will not be enough to bump the spread higher. So as of today I am not inclined to go long yet.
WIth a down day today I am still looking into NOV put spreads.
Phil