SPX Credit Spread Trader

rdemyan · Nov 28, 2005

Coach:

Is this a realistic possibility? In all the adjustments I've seen posted on this thread, I don't think I've ever seen a 20 point rollup (at least not without a substantial loss). This might be possible if the market really tanks, but in that case, the 1285 would probably be safe.

Under what scenarios do you see this as a realistic possibility without seriously impacting your profit for the month?

Quote from optioncoach:

Would like to roll the 1285 Calls to 1305 and am looking into it for more cushion with 3 weeks to expiration. [/B]

El OchoCinco · Nov 28, 2005

I said I would like to, not a very likely possibility given the large drop over the past hour. Basically I am waiting for the right moment to simply take off the calls altogether which can happen if I get a little more downside out of the market. As far as seriously impacting my profit for the month. I am not concerned with my profit anymore. I would be more than happy to simply take a small loss if I can and get out. With 3 weeks to go and just over 20 points OTM on my calls with a strong DEC looming, I have a nice credit banked to absrob most of the cost. Just waiting for the right exit...

Quote from rdemyan:

Coach:

Is this a realistic possibility? In all the adjustments I've seen posted on this thread, I don't think I've ever seen a 20 point rollup (at least not without a substantial loss). This might be possible if the market really tanks, but in that case, the 1285 would probably be safe.

Under what scenarios do you see this as a realistic possibility without seriously impacting your profit for the month?

El OchoCinco · Nov 28, 2005

Ok guys, sorry for the bonehead mistake but I chekced my paperwork and I got a fill of $0.70 on the 1285/1290 spread not $0.60 as I incorrectly stated. Therefore the adjusted price is factored in below to the revised position:

SO here are the revised numbers boiled down (not orthodox way to present but want everyone to follow along easily:

Roll Loss: ($33,000)
New Calls at 1285 $28,000
New Puts at 1220 $12,000
Banked Profits $ 6,000
SPX Partial hedge profits: $2,450
SPY Partial hedge profits: $9,000

Net Credit Should All Remain the Same: $24,450.

Sorry for that mistake...

andysmith · Nov 28, 2005

Coach,

I guess the last hour has a lot to do with this, but if this is the beginning of the much anticipated pullback, the pullback is likely to last either long enough or go low enough to touch the 10-day EMA, which is currently at around 1250. If this happens, you probably can leave your 1285. It also might be a good time to put on a new put spread.

Quote from optioncoach:

Would like to roll the 1285 Calls to 1305 and am looking into it for more cushion with 3 weeks to expiration.

Phil

rjg96 · Nov 28, 2005

Quote from andysmith:

Coach,

I guess the last hour has a lot to do with this, but if this is the beginning of the much anticipated pullback, the pullback is likely to last either long enough or go low enough to touch the 10-day EMA, which is currently at around 1250. If this happens, you probably can leave your 1285. It also might be a good time to put on a new put spread.

That's what I'm thinking/hoping. The SPX just touched 1259, btw.

But, as coach says, we have 3 weeks left.

What in your opinion (i'm directing this to everyone) would be most likely to cause the market to move higher between now and Dec expiration? Or, specificaly, what would give the market enough lift to get past 1270. The big thing would if retail sales are better than expected; but it sounds like that isn't going to happen. Crude oil's slide hasn't helped much today either.

piccon · Nov 28, 2005

The support for SPX should be the Breakout area (1246).

I am hoping by Wednesday or Thursday it can reach it.

I have my 1280/1285 and I am not ready to do anything with it.

I sweat a lot last week and I never thought about rolling . I am going to let it rock and roll.

I am looking for the exact spot to establish my Put Spreads.

Quote from andysmith:

Coach,

I guess the last hour has a lot to do with this, but if this is the beginning of the much anticipated pullback, the pullback is likely to last either long enough or go low enough to touch the 10-day EMA, which is currently at around 1250. If this happens, you probably can leave your 1285. It also might be a good time to put on a new put spread.

andysmith · Nov 28, 2005

1205/1220 put spread for $1.15 is looking attractive (of course, AFTER the pullback ends and the rally resumes so as not to get in the way of a locomotive)...

zman7854 · Nov 29, 2005

Just wondering if there are some contrarian indicators starting to show their heads out there...every market pundit and their dog has been calling this bull xmas year end rally (market always has a way of proving the majority wrong), Coach thinking it may be time to roll up the short call strikes (sorry Phil) :eek:

My scatterbrained two cents worth is that the SPX has had a decent run here and may be time to catch it's breath, helluva move from 1170's just a month ago...just enough time to have a breather for those with 1280-85 short Dec calls to expire OTM. Although I don't see any real resistance on the charts until 1300, we still have to get through December. Also, on the flip side of the mkt pundits pov, alot say how January goes so goes the year. So all that being said I just don't see a bullish Nov AND Dec AND Jan.

Agyar · Nov 29, 2005

Quote from zman7854:

Just wondering if there are some contrarian indicators starting to show their heads out there...

Don't know about contrarian indicators, but the trend this week is most certainly down so far. Market not making highs on what I consider pretty good news also, so I am bearish for the next few days. I have a call spread that is still too close for comfort. Not sure what I am going to do with it still, so it is riding for now.

Any of this can and will change on a moment's notice. Which is what makes our lives so interesting.

piccon · Nov 29, 2005

I think We have seen a short term top at 1270.64. Fibonacci level 1.382 at 1271. There is a lot of profit taking at this level. 1287 will be the next level. so if it breaks 1271, my 1280 will be in trouble. The reason I think We are topping short term is because there is this pattern established last 4 trading days; We have lower high at each side of the high bar of the 1270.64 which indicates a Swing High.

The next fibonacci levels (supports) are: 1249 (0.236) and 1235 (0.382).

Even with triple good economic data, the market is not reacting that great.

Quote from zman7854:

Just wondering if there are some contrarian indicators starting to show their heads out there...every market pundit and their dog has been calling this bull xmas year end rally (market always has a way of proving the majority wrong), Coach thinking it may be time to roll up the short call strikes (sorry Phil) :eek:

My scatterbrained two cents worth is that the SPX has had a decent run here and may be time to catch it's breath, helluva move from 1170's just a month ago...just enough time to have a breather for those with 1280-85 short Dec calls to expire OTM. Although I don't see any real resistance on the charts until 1300, we still have to get through December. Also, on the flip side of the mkt pundits pov, alot say how January goes so goes the year. So all that being said I just don't see a bullish Nov AND Dec AND Jan.