SPX Credit Spread Trader

Interesting. I assume you have other positions in place not mentioned here. Because the 1205/1195 bear put doesn't hedge the bear call. For both positions you would like the index to move in the same general direction --> down (more so for the bear put than bear call).

Or am I missing something?

Quote from andysmith:

I'm trying a slight variation for DEC.

ENTRY: I sold a 1270/1280 call spread for $1.20 -- risky, but I halved the position size compared to the position size I would have used for a farther out spread. If I have to roll up, I have unused margin to increase the position size.

EXIT: I'm expecting a pullback in the market in the next few days and may close out the 1270/1280 if I can buy back for 0.60 or so, and not necessarily hold to expiration. Overall, I don't think the SPX will break through 1245 and heavy 1253 resistance in a sustainable way in the year end rally.... BWDIK??

I also bought a 1205/1195 put spread for a debit of $2.00 as a downside hedge. Last month, a similar hedge turned into $9 for me...
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Andy, looks like a cool spread but your hedge cost more than your call spread...is the hedge fewer contracts? what does BWDIK mean? TIA donna

Quote from andysmith:

I'm trying a slight variation for DEC.

ENTRY: I sold a 1270/1280 call spread for $1.20 -- risky, but I halved the position size compared to the position size I would have used for a farther out spread. If I have to roll up, I have unused margin to increase the position size.

EXIT: I'm expecting a pullback in the market in the next few days and may close out the 1270/1280 if I can buy back for 0.60 or so, and not necessarily hold to expiration. Overall, I don't think the SPX will break through 1245 and heavy 1253 resistance in a sustainable way in the year end rally.... BWDIK??

I also bought a 1205/1195 put spread for a debit of $2.00 as a downside hedge. Last month, a similar hedge turned into $9 for me...
More...
 
That is a 50 point roll. Is that a lot or a little for the NDX. I do not know. If you feel yourself learning on the fly then best get out while you can and plan the adjustments ahead of time. Makes it easier to think than those times when you have to do it in panic mode. If there are no other higher strikes you feel comfortable with you can roll but given the dread you are experiencing, perhaps it might be better to cut and run and re evaluate the use of NDX and this strategy. I do not know if 1700 is a support/resistance, historical high or other important line since I do not know that index. Sorry :(

Quote from piccon:

How would you roll this one?

1650/1665

is 1700/1715 ok?
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You are not missing anything, you just type slower than me LOL, read my message above yours ;)

Quote from rdemyan:

Interesting. I assume you have other positions in place not mentioned here. Because the 1205/1195 bear put doesn't hedge the bear call. For both positions you would like the index to move in the same general direction --> down (more so for the bear put than bear call).

Or am I missing something?
More...
 
It's not a hedge... YET because I have not put on a put spread yet. I plan to put on a 1150/1160 or so in the next few days if/when the market dips, but you're right -- against my current position it's not hedging anything (maybe I should call it a preemptive hedge?).

Quote from optioncoach:

Just to clarify and be anal, the 1205/1195 put spread is not a hedge because it is not hedging anything. Since you have a bear call spread, the bear put spread is taking a similar directional bet on the pullback. Nothing wrong with it but I do not want you to think of it as a hedge. If the market surges higher you could lose on both. Just want to lay the risk out although I know you know that. Make sure others know too ;)
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Donna, the preemptive hedge used up 15% of the credit from the call spread. BWDIK -- but what do I know...


Quote from DonnaV:

Andy, looks like a cool spread but your hedge cost more than your call spread...is the hedge fewer contracts? what does BWDIK mean? TIA donna
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I decided to add to the 1275/1280 DEC bear call position.

Got it filled at $0.50 today.

The mid was actually at $0.65 so I placed an order for $0.60. I admit the mid seemed very high and when ToS called down the mid in the pit was more like $0.50 to $0.55. The ToS person was unclear as to why there was such a large difference in the pit and what I saw on my screen.

Got it filled, but any new bear calls will most likely be at significantly higher short strikes.
 
Piccon:

I see the NDX closed above 1650. How did you make out with your problem? Hopefully, things worked out reasonably well, under the circumstances.


Quote from piccon:

Coach,

I am in a big hole with my NDX 1650/1665

NDX is now at 1645. I need to take action. What should I do to roll it.

Please advise
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I must be in some kind of weird kharma space or twilight zone.

I had an order in with OX to close out an 1100/1110 Nov SPX bull put for $0.05.

After the close I saw it hadn't filled so I changed it to a GTC order for a debit of $0.05. The OX order came back to inform me that the market was closed. I sent it through.

So the screen shows the previous order as trying to be cancelled (orange box). About a minute or so later I refresh the screen (mind you it is now 11 to 12 minutes after closing), and the order is filled???!

Again, not that I'm complaining, but what is going on?? Just to be clear it is definately the second GTC order that was placed that was filled. The order number is different from the original order placed this morning.

My November is now over and I'm in for a return of about 2.5% on margin. Would have been higher if I hadn't placed the risky 1240/1250 Nov bear call that I bailed on a week ago Monday. Time to focus fully on December.
 
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