SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
After actually participating in market action, rather than simply reading about it, does anyone here still believe that this strategy requires only 1 or 2 "adjustments" per year?
This thought was offered several hundred pages ago in this thread. It was a thought of which I tried to disabuse from the minds of the loyal participants of this thread.....to little avail.
Of course, I have traded this way for years and years (among several other styles). I found years ago that is not quite as easy as it first appears....though it can be very profitable over time if done right and with a sufficient bankroll.
I wonder what the preponderance of thought is now among those who've been in the fight?
Best,
Dr. Z
This thought was offered several hundred pages ago in this thread. It was a thought of which I tried to disabuse from the minds of the loyal participants of this thread.....to little avail.
Of course, I have traded this way for years and years (among several other styles). I found years ago that is not quite as easy as it first appears....though it can be very profitable over time if done right and with a sufficient bankroll.
I wonder what the preponderance of thought is now among those who've been in the fight?
Best,
Dr. Z
Doc,
I'm still trading this system. With warning from you and other people, I reduced contract size from 10-15 down to 3 contracts. I am benefit from reading Phil's market analysis. He did mention the market seasonal behavior so I did not do any credit spread on call side for this Month. I also learned from this forum on risk management. I just want to last long enough to know how to trade.
I agree that you'll need more than 1 or 2 "adjustments" a year.
There are not much trades here where experience traders post the real time trading action and discuss with us.
I'm still trading this system. With warning from you and other people, I reduced contract size from 10-15 down to 3 contracts. I am benefit from reading Phil's market analysis. He did mention the market seasonal behavior so I did not do any credit spread on call side for this Month. I also learned from this forum on risk management. I just want to last long enough to know how to trade.
I agree that you'll need more than 1 or 2 "adjustments" a year.
There are not much trades here where experience traders post the real time trading action and discuss with us.
Doc, I dont recall Phil ever saying it was easy. He also stated that it is not a just sell the iron condor trade. It is one way of trading a market , when the market is right. Also , I would imagine that most traders here other than absolute rookies , utilize other trading strategies , and other markets. Phil seems to be having quite a good year, how about you?
Sam, I have only read the risk management chapter which Phil makes available free. It is worth the read, but he has very gratiously discussed a great deal of whatever could be offered in the book by answering every question thrown at him. The book is cheap on the net , so if your curious beyond this thread, buy it.Its got to be a better read than Maria Bartoromo or other CNBC authors!
I haven't read very much of it, I must confess. But you should know and Phil is very upfront about this that it really does not cover adjustments to credit spreads in any depth (Phil: correct me if I'm wrong). That's one of the reasons I'm a member of this thread. Assuming I'm right, you'll learn far more from following this thread as actual positions and adjustments are posted here.
However, the book does cover adjustments to other positions like converting a call into a bear call spread, etc. Interesting reading and good to know about these adjustment strategies.
However, the book does cover adjustments to other positions like converting a call into a bear call spread, etc. Interesting reading and good to know about these adjustment strategies.
Coach,
I'm rolling (market conditions taken into account) when I am 10 points from the strike as well. Yesterday I rolled a 1270/1280 into 1280/1290 when SPX was roughly 1260. Took a loss of 1.40 (not factoring in gains from other adjustments).
Have you looked at rolling into Jan?
I'm rolling (market conditions taken into account) when I am 10 points from the strike as well. Yesterday I rolled a 1270/1280 into 1280/1290 when SPX was roughly 1260. Took a loss of 1.40 (not factoring in gains from other adjustments).
Have you looked at rolling into Jan?
Quote from optioncoach:
What a day huh.... should be an interesting week coming up.... Will worry if we cross 1275 and have to roll again....
Extractor:
Couldn't agree with you more. I think Doc has a lot to contribute if he wants to, but he chooses to stay more on the negative side. For example, gloating over those of us who had November bear calls around 1240.
I'm not saying he is wrong when he points out that we've had more than 1 or 2 adjustments this year. No doubt the number of adjustments is a function of market movement. I hope that the biggest thing I've learned from this month is that I don't always have to be in the market and I certainly don't have to have an iron condor on. Instead for Nov. I should have played bull puts only (okay: I'll definately be more aware of that next year).
Let's be fair too, I've seen Phil post a number of times that this is a credit spread thread not an iron condor thread.
Whether you agree with Phil or not, he is one of the few experienced traders who lays it all out for us. He just doesn't show us the good credit trades but all of them and that takes guts and confidence.
My own feeling is that this thread is fairly balanced. It looks like we may have some rough times ahead with our bear calls, but that's part of trading. I personally find it helpful to have a thread like this where I can air my ideas and get educated.
Finally, everybody had to start somewhere and everybody has made mistakes and that includes the professionals. The key is to learn from them and hopefully be mentored through the process. Some, like Phil and yourself, prefer to mentor and be helpful. Others, well.....
Couldn't agree with you more. I think Doc has a lot to contribute if he wants to, but he chooses to stay more on the negative side. For example, gloating over those of us who had November bear calls around 1240.
I'm not saying he is wrong when he points out that we've had more than 1 or 2 adjustments this year. No doubt the number of adjustments is a function of market movement. I hope that the biggest thing I've learned from this month is that I don't always have to be in the market and I certainly don't have to have an iron condor on. Instead for Nov. I should have played bull puts only (okay: I'll definately be more aware of that next year).
Let's be fair too, I've seen Phil post a number of times that this is a credit spread thread not an iron condor thread.
Whether you agree with Phil or not, he is one of the few experienced traders who lays it all out for us. He just doesn't show us the good credit trades but all of them and that takes guts and confidence.
My own feeling is that this thread is fairly balanced. It looks like we may have some rough times ahead with our bear calls, but that's part of trading. I personally find it helpful to have a thread like this where I can air my ideas and get educated.
Finally, everybody had to start somewhere and everybody has made mistakes and that includes the professionals. The key is to learn from them and hopefully be mentored through the process. Some, like Phil and yourself, prefer to mentor and be helpful. Others, well.....
Dr. Z,
I think the number of adjustments can be substantially reduced if a couple of ENTRY rules are followed (my two cents here based on what I have learned):
1) If the market is trending strongly when the spread is initiated, put on a spread that follows the trend.
2) Don't put on a spread against the trend hoping the trend will peter out before expiration... and before the short strike is hit (the folly this month). (In other words, don't call tops and bottoms).
3) Put on a spread each month but resist the urge to do an iron condor each month. Do it only if the market is going sideways.
4) Put on a hedge at the same time the spread is initiated. Look at it as insurance or a tax to play the game. Don't wait till you need the hedge -- it might be too late.
5) Watch position size.
There are also EXIT rules but the ENTRY rules above, at least in my case, will cause fewer adjustments.
I think the number of adjustments can be substantially reduced if a couple of ENTRY rules are followed (my two cents here based on what I have learned):
1) If the market is trending strongly when the spread is initiated, put on a spread that follows the trend.
2) Don't put on a spread against the trend hoping the trend will peter out before expiration... and before the short strike is hit (the folly this month). (In other words, don't call tops and bottoms).
3) Put on a spread each month but resist the urge to do an iron condor each month. Do it only if the market is going sideways.
4) Put on a hedge at the same time the spread is initiated. Look at it as insurance or a tax to play the game. Don't wait till you need the hedge -- it might be too late.
5) Watch position size.
There are also EXIT rules but the ENTRY rules above, at least in my case, will cause fewer adjustments.