At the moment I was going to place the hedge, the SPYs were cheaper. I thought the XSP was always cheaper but I have occasionally seen the SPYs for less at the same strikes. I do not know the rhyme or reason but I pick the cheapest or tightest spread. My next upside hedge will be in the XSP if needed which is a very likely possibility.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Ditto. Possibly a by-product of MMs wanting to get flat in a hurry for end of day and/or looking at futures movement to gauge the next days direction.
CORRECTION! I have my idiot hat on. Apparently I never got filled on the 1190/1195 put spread, I read filled but it was for the wrong line so I am an idiot. Therefore, I did not grab the 1190/1195 but today I did grab the 1200/1205 for $0.25. The corrected position is inserted below
CURRENT REVISED POSITIONS AND REVISED HEDGES:
Positions:
-300 SPX DEC 1200/1205 Put Spreads @ $0.25
(closed 1135/1140 Put Spread for $0.20 net profit)
-300 SPX DEC 1275/1280 Call Spreads @ $0.40
Hedges:
+ 200 SPY DEC 127 Calls @ $0.30
- 200 SPY DEC 128 Calls @ $0.30 (rolled into free hedge!)
+ 10 SPX DEC 1265 Calls @ $6.00
- 10 SPX DEC 1270 Calls @ $6.00 (rolled into free hedge!)
CURRENT REVISED POSITIONS AND REVISED HEDGES:
Positions:
-300 SPX DEC 1200/1205 Put Spreads @ $0.25
(closed 1135/1140 Put Spread for $0.20 net profit)
-300 SPX DEC 1275/1280 Call Spreads @ $0.40
Hedges:
+ 200 SPY DEC 127 Calls @ $0.30
- 200 SPY DEC 128 Calls @ $0.30 (rolled into free hedge!)
+ 10 SPX DEC 1265 Calls @ $6.00
- 10 SPX DEC 1270 Calls @ $6.00 (rolled into free hedge!)
ARGHHHH...there needs to be an icon for banging your head on the keyboard...I closed out long calls on intc and smh (modest profit) and in 5 minutes they break out
..I SHOULD have gone skiing yesterday and I'm backing away from the computer......BTW from good sources the best snow in Vail (this time of year) in years
..I SHOULD have gone skiing yesterday and I'm backing away from the computer......BTW from good sources the best snow in Vail (this time of year) in yearsEven worse is that you did not tell us you got out so we could have gone in long 
Quote from DonnaV:
ARGHHHH...there needs to be an icon for banging your head on the keyboard...I closed out long calls on intc and smh (modest profit) and in 5 minutes they break out
Earlier in this thread (http://www.elitetrader.com/vb/showthread.php?s=&postid=872010)
someone mentioned the article I wrote about double butterflies.
I have now updated the whole article, with new and nicer graphs and with all the wisdom I gained in the year since I first wrote it , mainly in the section "Is this a "good" trade? Can I make money with double butterflies?"
Here is the updated article:
http://www.kaininito.com/options/articles/2005-11-01.html
Cheers - Kai
someone mentioned the article I wrote about double butterflies.
I have now updated the whole article, with new and nicer graphs and with all the wisdom I gained in the year since I first wrote it
, mainly in the section "Is this a "good" trade? Can I make money with double butterflies?"Here is the updated article:
http://www.kaininito.com/options/articles/2005-11-01.html
Cheers - Kai
Kai,
It was me. Thanks for the update. How about an article on double butterflies?
COACH: [off-topic, sorry].
It was me. Thanks for the update. How about an article on double butterflies?
COACH: [off-topic, sorry].
Quote from kaininito:
Earlier in this thread (http://www.elitetrader.com/vb/showthread.php?s=&postid=872010)
someone mentioned the article I wrote about double butterflies.
I have now updated the whole article, with new and nicer graphs and with all the wisdom I gained in the year since I first wrote it
Here is the updated article:
http://www.kaininito.com/options/articles/2005-11-01.html
Cheers - Kai
Andy,
We've been tracking this trade for the past two months. It's interesting... and unfortunately with the big run ups and downs, it has not been as profitable as expected. That said.. we're still virtually trading this approach.
We are buying Siamese Butterflies... and adjusting at the wing with either the call or put. We're putting on the butterfly ATM on the adjustment.... but the market has both times continued to move in the same direction.
I like the point in adjusting equal distances and creating a median iron condor with a lesser time to expiration. Concern here is.... what happens if it's the week before expiration? There's generally not enough time left in the month to expand to wings profitable to carry the adjustment.
Let me know your thoughts on this....
I'd love to internet conference call with you and others on this strategy... maybe MOMONEY...
Do yo SKYPE? www.skype.com
If's free.. and allows conferencing calling... more clearly than my telephone.
Murray
MoMoney,
You're right, the % return on margin of the iron flies were greater than FOTM spreads even after adjustments... BUT the position size of the fly was significantly smaller. And that's where the problem is, I think. Correct me if I'm wrong but the risk of blowing out of the iron fly is much higher than a FOTM spread and therefore, it's too risky to start with a fly that risks the same margin as a FOTM. So, even though the %ROM was higher for the fly compared to a FOTM spread, the total $ returned was not.
In case you're interested, here's the trade logic I used (learned from an experienced trader). Right now, XEO=575. Put on a DEC 560/575/590 iron fly. If the index moves to a wing (560 for example) convert to a condor 15 points OTM from the current price (in this example it'd be a 530/545/575/590 iron condor). After I have a condor (i.e. after one adjustment), if the index moves within 5 points of my short strike I either roll again 10 or 15 points away from the market or take the trade off if there is profit to protect. While trade is on, you can play the swings to build up some almost-free hedges. [/QUOTE]
We've been tracking this trade for the past two months. It's interesting... and unfortunately with the big run ups and downs, it has not been as profitable as expected. That said.. we're still virtually trading this approach.
We are buying Siamese Butterflies... and adjusting at the wing with either the call or put. We're putting on the butterfly ATM on the adjustment.... but the market has both times continued to move in the same direction.
I like the point in adjusting equal distances and creating a median iron condor with a lesser time to expiration. Concern here is.... what happens if it's the week before expiration? There's generally not enough time left in the month to expand to wings profitable to carry the adjustment.
Let me know your thoughts on this....
I'd love to internet conference call with you and others on this strategy... maybe MOMONEY...
Do yo SKYPE? www.skype.com
If's free.. and allows conferencing calling... more clearly than my telephone.
Murray
MoMoney,
You're right, the % return on margin of the iron flies were greater than FOTM spreads even after adjustments... BUT the position size of the fly was significantly smaller. And that's where the problem is, I think. Correct me if I'm wrong but the risk of blowing out of the iron fly is much higher than a FOTM spread and therefore, it's too risky to start with a fly that risks the same margin as a FOTM. So, even though the %ROM was higher for the fly compared to a FOTM spread, the total $ returned was not.
In case you're interested, here's the trade logic I used (learned from an experienced trader). Right now, XEO=575. Put on a DEC 560/575/590 iron fly. If the index moves to a wing (560 for example) convert to a condor 15 points OTM from the current price (in this example it'd be a 530/545/575/590 iron condor). After I have a condor (i.e. after one adjustment), if the index moves within 5 points of my short strike I either roll again 10 or 15 points away from the market or take the trade off if there is profit to protect. While trade is on, you can play the swings to build up some almost-free hedges. [/QUOTE]