SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
The post below contains my positions:
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.
It is 400 1215/1220 ($0.70) and 1285/1290 ($0.30) Put and Call spreads, respectively.
I am looking for a nice week in a 1260/1270 rangebound for some theta to kick in and watch the 1270/1275 and 11,000 DOW level closely as I see those as the only short-term resistance. I would prefer a nice pullback to 1250 area but I also want Jessica Alba...
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.
It is 400 1215/1220 ($0.70) and 1285/1290 ($0.30) Put and Call spreads, respectively.
I am looking for a nice week in a 1260/1270 rangebound for some theta to kick in and watch the 1270/1275 and 11,000 DOW level closely as I see those as the only short-term resistance. I would prefer a nice pullback to 1250 area but I also want Jessica Alba...
Well, I can give you all sorts of contrarian indicators. (1) Bullishness is rampant. Almost every survey of sentiment is approaching bullish extremes. (2) Breadth has narrowed as the rally from 10/14 extended. (3) Prices have been rising on mediocre volume. (4) Equity mutual fund cash is at an all time low.. All of these are consistent with a late stage rally.
The one indicator that has been consistently bullish is momentum. I expect another push to a nominal new high in the S&P to occur on waning momentum which would help complete the picture.
My personal opinion is that a major top is imminent (if it did not already occur last Wednesday). Am I nuts? Maybe. After all, how can a major top occur during such a seasonally strong period? The answer is that major tops and bottoms never announce themselves and always occur at a time when the fewest number of people suspect it. The maximum number of suckers need to be drawn in.
Personally, I'd be a hell of a lot more nervous about selling put spreads than call spreads right now. Oh, and remember that my views are worth exactly what you've paid to read them.
Jeff I agree with you but I thought I had heard that there was still a lot of cash. Is there a handy-dandy place you can peak to find out where Equity mutual fund cash is at any given time? Thanks donna
Ack. I wish I could give you the exact source. I read it somewhere last week and advancing age precludes me from recalling the exact details, but the number was something like 3.5% of mutual fund assets are now in cash which is an all time low - even lower than at the end of the bull market of the 90s. Mutual fund managers are notorious for holding minimal cash at major market tops. Here's one web page I found this morning that's a few months old that shows the trend and explains the phenomenon:
http://www.investmentu.com/IUEL/2005/20050805.html
By the way, folks, I'd LOVE to hear the bull argument other than momentum. I see so much evidence piling up on the bear side, I'm afraid my view is beginning to get unbalanced. Give me some reasons why the bear case is wrong.
(Phil: If this is too off-topic I'll shut up now)
If Jessica Alba were an index option I would certainly take a position...
Sorry, goofy day and had to jump on her... I mean it, jump on it, the joke...
Anyway, today is a flat day and a good day to just watch theta run. If you are not in DEC positions already then the time to expiration might not be enough to get into a decent DEC position unless you take on some risk and get close with your strikes to the current index. If you are not in DEC just be patient and keep JAN on the horizon. Next week, JAN is fair game and some juicy deep deep OTM premiums.
Sorry, goofy day and had to jump on her... I mean it, jump on it, the joke...
Anyway, today is a flat day and a good day to just watch theta run. If you are not in DEC positions already then the time to expiration might not be enough to get into a decent DEC position unless you take on some risk and get close with your strikes to the current index. If you are not in DEC just be patient and keep JAN on the horizon. Next week, JAN is fair game and some juicy deep deep OTM premiums.
Quote from Synaptic:
Anyone taking a position today ? Just curious ...