SPX Credit Spread Trader

I feel your pain:( hate that when it happens) my short nov put at 1220 looking ugly but not willing to get out just yet...wait and see...however did sell my Dec p/s 1180/1165 for 1.10x40 call sp is 1185/1300 for .65 (last wk)

Quote from optioncoach:

F@#$in SPX.... nothing worse than being right but taking your trade off too soon and not giving it time to do what you intended it to do.... LOL
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Honestly I am surprised at all of you..... you know last week I put on a SPY call position as a partial hedge for my DEC SPX call spreads and then added a directional bear put spread and took it off today. What other signs do you need to tell you the market will pull back lower LOL!
 
Hey coach even you can't be a %100 predictor:D

Quote from optioncoach:

Honestly I am surprised at all of you..... you know last week I put on a SPY call position as a partial hedge for my DEC SPX call spreads and then added a directional bear put spread and took it off today. What other signs do you need to tell you the market will pull back lower LOL!
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I've been watching the IV on the Nov 1245 calls. It went from 8.5 on Friday to 11.5 yesterday to 12.3 today (give or take a little). That was a big move from Friday to Monday given that the market hasn't moved all that much the last few days. I had attributed it to the PPI numbers coming out and the hearings for the new Fed chief. Any thoughts?

ryan
 
I almost took that play for $1.

Didn't do it, but should have.

I've started swing trading some SPY opts. Bought 124P for 1.75 yesterday, will start legging into some condors this way. Will buy the Calls on a pullback. Anybody do this. I know there was talk of it when we were talkiing about Butterflies on optionclub.

I'm curious as to how best to select strikes....I'm not used to actually making the right directional call.......what to sell on pullback to lock in profits?

Quote from optioncoach:

F@#$in SPX.... nothing worse than being right but taking your trade off too soon and not giving it time to do what you intended it to do.... LOL
More...
 
Honestly the best way to approach this is to study a chart of the SPX and study as many technical indicators as possible to find the ones you feel you can understand and read the best to make decisions as to price swings in the SPX. It is riskier since directional bets are harder but the more you study the charts and behavior the more you might get a feel for timing your entries. credit spreads are not as sensitive to such entries so it does require more skill in a way.

Phil

Quote from gatorplease:

I almost took that play for $1.

Didn't do it, but should have.

I've started swing trading some SPY opts. Bought 124P for 1.75 yesterday, will start legging into some condors this way. Will buy the Calls on a pullback. Anybody do this. I know there was talk of it when we were talkiing about Butterflies on optionclub.

I'm curious as to how best to select strikes....I'm not used to actually making the right directional call.......what to sell on pullback to lock in profits?
More...
 
Thats very interesting because on my TOS platform the IV on the nov 1245 calls went DOWN today and is currently showing 9.97% so do IV's vary depending on the platform used???
Quote from ryank:

I've been watching the IV on the Nov 1245 calls. It went from 8.5 on Friday to 11.5 yesterday to 12.3 today (give or take a little). That was a big move from Friday to Monday given that the market hasn't moved all that much the last few days. I had attributed it to the PPI numbers coming out and the hearings for the new Fed chief. Any thoughts?

ryan
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Ryan,

Without looking into this in detail I would suspect this is more to do with the Nov 1245 calls moving along the IV skew over the last couple of days.

This close to expiration and the skew can become pretty steep so even a small move of the underlying can impact the IV, and by definition, the price of options or rather their relative position on the skew quite significantly.

Using the ATM IV as a guage of whether "real" IV has gone up or not (for example in anticipation of PPI numbers etc.) in general may be a better tool. Or alternatively, VIX, which takes account of both ATM and further OTM SPX options IV in some magical and mysterious way is just such a gauge. It hasn't really moved that much since Friday IIRC which on the surface would seem to confirm that what you observed was a manifestation of skewing.

Again, I haven't investigated your specific options in detail so treat above as such.

Momoney.

Quote from ryank:

I've been watching the IV on the Nov 1245 calls. It went from 8.5 on Friday to 11.5 yesterday to 12.3 today (give or take a little). That was a big move from Friday to Monday given that the market hasn't moved all that much the last few days. I had attributed it to the PPI numbers coming out and the hearings for the new Fed chief. Any thoughts?

ryan
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Donna,

Technically yes. It depends on what model is being used to calculate IV but in general most platforms will be using the same BS model etc. or close enough.

Just a hunch but the value reported by Ryan might have been before the sell off in the afternoon and as my previous post alludes to, significant change in IV of a specific option series can result due to relatively small change in underlying this close to expiration.

Momoney.

PS

Your current positions are simply nuts.

Quote from DonnaV:

Thats very interesting because on my TOS platform the IV on the nov 1245 calls went DOWN today and is currently showing 9.97% so do IV's vary depending on the platform used???
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You could be right because late yesterday and early today the IV was around 12 I think...I think my positions are perfect :p actually I just put them on in the last week and sort of playing it as a weekly...as of today I can close the nov current IC at a profit but I'm waiting to see if there is a big move in either direction before closing out...
Quote from momoneythansens:

Donna,

Technically yes. It depends on what model is being used to calculate IV but in general most platforms will be using the same BS model etc. or close enough.

Just a hunch but the value reported by Ryan might have been before the sell off in the afternoon and as my previous post alludes to, significant change in IV of a specific option series can result due to relatively small change in underlying this close to expiration.

Momoney.

PS

Your current positions are simply nuts.
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