SPX Credit Spread Trader

THANKS Phil you cleared that up for me...you need to train the help desk at TOS!

That is not NOV 2 05, the 2 that follows the NOV is to differentiate it from the regular NOV SPX strikes.

Phil [/QUOTE]:D
 
Since I was doing the calendars with the weeklies I noticed the first weekly was NOV1 and then the current one is NOV2. Since they skip expiration week I assume the next one will be NOV3 or DEC1 depending on when expiration is.

Phil

Quote from DonnaV:

THANKS Phil you cleared that up for me...you need to train the help desk at TOS!

That is not NOV 2 05, the 2 that follows the NOV is to differentiate it from the regular NOV SPX strikes.

Phil
More...
:D [/QUOTE]
 
Got the following trade filled today:

DEC SPX 1120/1135 bull put spread at $0.70

Got ToS to 'goose' the trade. I was right up against the mid (about $0.025 below) and they came through again for me.

I love these guys!:)
 
Not to digress off Topic, but do yourselves a favor and read this article over the weekend. It really opened my eyes, and I'm a guy who does all of his banking, trading, credit cards...everything online. I went through a full anti-everything this morning on my computer, and I'm all clean and fresh.

Cyber crooks break into online trading accounts with ease
http://www.usatoday.com/tech/news/computersecurity/2005-11-02-cybercrime-online-accounts_x.htm

How one little fob could foil a cyber bank robber
http://www.usatoday.com/tech/news/computersecurity/2005-11-02-cybercrime-prevention_x.htm


Okay, now back to our original program.

sd
 
Don't know if this was discussed earlier. But,
I was looking on IB and was looking at selling a Dec 1140/1135 Bull Put spread. And I noticed:

The B/A for the 1135 strike is 2.65/3.20 and
the B/A for the 1140 strike is 3.00/3.80.

That obviously can't be right.

If you sell the 1140 and buy the 1135, you'll get a debit
(-3.00 + 3.20 = +.20).

Why is that??

Thanks.
 
The wide bid/ask spreads of the SPX sometimes result in negative bids or asks when you know it has to be positive. In other words it shows as a debit to sell the spread but it is just the nature of the wide spreads. It should be taken into account when looking at the midpoint or when you are trying to get a fill though since it really reflects the wideness of the spread.

Phil

Quote from daytrader85:

Don't know if this was discussed earlier. But,
I was looking on IB and was looking at selling a Dec 1140/1135 Bull Put spread. And I noticed:

The B/A for the 1135 strike is 2.65/3.20 and
the B/A for the 1140 strike is 3.00/3.80.

That obviously can't be right.

If you sell the 1140 and buy the 1135, you'll get a debit
(-3.00 + 3.20 = +.20).

Why is that??

Thanks.
More...
 
Phil:

As a followup:

I always place limit orders, but if one were to place a market order on the trade in question, it would be possible that it could turn into a debit paid for the trade, wouldn't it.


Quote from optioncoach:

The wide bid/ask spreads of the SPX sometimes result in negative bids or asks when you know it has to be positive. In other words it shows as a debit to sell the spread but it is just the nature of the wide spreads. It should be taken into account when looking at the midpoint or when you are trying to get a fill though since it really reflects the wideness of the spread.

Phil
More...
 
It would not turn up to be a debit but it would get filled at the worst possible credit. Since you are selling the spread for a credit at market, you would get filled as a credit.

Phil

Quote from rdemyan:

Phil:

As a followup:

I always place limit orders, but if one were to place a market order on the trade in question, it would be possible that it could turn into a debit paid for the trade, wouldn't it.
More...
 
The reason I thought that this could potentially happen is something that happened to me when I first started trading ICs.

I had placed a trade as an iron condor and not as two separate credit spreads. After I placed the trade, the market moved strongly in one direction.

When I got filled, I realized that one of the sides of the IC actually got filled at a debit (can't remember which). However, the overall IC credit limit requested was received.

This is one of the reasons now that I am reluctant to place orders as an iron condor. You could argue, however, that I should have been keeping an eye on the market and adjusted my IC trade, at that time, accordingly (which is certainly true).

But I'm posting this for traders just starting with ICs as something to watch out for.


Quote from optioncoach:

It would not turn up to be a debit but it would get filled at the worst possible credit. Since you are selling the spread for a credit at market, you would get filled as a credit.

Phil
More...
 
I sold the November 1250-1220 SPX Put Spread for 4.2 around October expiration. I have since moved the long out to the December 1275, but I am still nervous about the short side. Currently, I am trying to buy the Regular November/Weekly November 1215 Calendar for 3.5.

I see the possible outcomes next week as--

1. The market tanks (the calls both go to 0) and I make .70 (4.2-3.5).
2. The market stays the same and I buy back the short and have to deal with the extra long call protection during monthly expiration week.
3. The market goes up above 1220 and I have a 1.5 (5-3.5) point gain.

All these options seem tolerable given the potential risk I have been looking at the past few days. What am I missing? I guess I am giving up downside gains if the market tanks. Thanks for any help.

Chip
 
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