SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
A bull put spread is selling X number of OTM puts and buying X number of further OTM puts. The number of puts bought and sold have to be the same to be a spread. If not then you have naked puts and the huge requirements that go with it.
I am not doing anything unique, simply doing credit spreads. Credit spreads have a fixed margin defined as the difference between the strikes minus the premium received. But puts bought and sold have to be the same number.
I am not doing anything unique, simply doing credit spreads. Credit spreads have a fixed margin defined as the difference between the strikes minus the premium received. But puts bought and sold have to be the same number.
Slightly OT but I went long some ES at the close to carry over to tomorrow. Late buying seemed to give some strength that could carry over to tomorrow morning at least...
ok great thanks. Since I am new to this forum, I am unsure how to follow your trades. When you show a trade, for example your frist one on the thread assue you trade it both ways.
"RIght now my current trade open is (which can be opened today):
61 JUN 1075/1090 Bull Put Spread @ $0.75
Credit = $4,575
Risk = $91,500
Return = 5.00%
Time to Exp. = 30 days
"
ie. you wrote 61 contracts and bought 61 at a lower price. Sorry for the ignorance, just trying to understand a little better. Thanks
"RIght now my current trade open is (which can be opened today):
61 JUN 1075/1090 Bull Put Spread @ $0.75
Credit = $4,575
Risk = $91,500
Return = 5.00%
Time to Exp. = 30 days
"
ie. you wrote 61 contracts and bought 61 at a lower price. Sorry for the ignorance, just trying to understand a little better. Thanks
Yes, using that example if I say 61 1075/1090 put spreads it means I sold 61 1090 Puts and bought 61 1075 Puts to make a bull put spread for a net credit.
You must be the most patient man I've ever met. When I first read his posts, that he is trying to trade without actually understanding:
1) That he is selling puts naked without understanding margin (gasp!)
2) Doesn't understands what a credit spread is
3) I'm sure has no concept of the whole main point of this thread "RISK MANAGEMENT" (makes for a thin wallet)
I was experiencing what the bush administration calls, "Shock and Awe". But not you, you just write back the simple answers, and walk everyone through the steps, beginner, intermediate, or advanced.
Well I say, good job sir, for keeping everyone in the game and not losing it! That's why there are over 400 pages to read in this forum.
sd
PS: Can anyone explain to me what RiskArb is talking about?? I'm sure it's a valuable contribution, I just can never figure out what he is saying. For example what is distro??
1) That he is selling puts naked without understanding margin (gasp!)
2) Doesn't understands what a credit spread is
3) I'm sure has no concept of the whole main point of this thread "RISK MANAGEMENT" (makes for a thin wallet)
I was experiencing what the bush administration calls, "Shock and Awe". But not you, you just write back the simple answers, and walk everyone through the steps, beginner, intermediate, or advanced.
Well I say, good job sir, for keeping everyone in the game and not losing it! That's why there are over 400 pages to read in this forum.
sd
PS: Can anyone explain to me what RiskArb is talking about?? I'm sure it's a valuable contribution, I just can never figure out what he is saying. For example what is distro??
Implied distro = [log]normal distribution of underlying prices, as represented by the option markets; in this case, the current atm straddle in the de facto representation.
IOW, if the Jan straddle is 45 points, don't sell spreads within that 90 point range. That is, if you're going to continue selling upside[slope] gamma. You guys already know my view on selling dimes.
IOW, if the Jan straddle is 45 points, don't sell spreads within that 90 point range. That is, if you're going to continue selling upside[slope] gamma. You guys already know my view on selling dimes.
Ok, I'm really trying to understand what your talking about, I just think it's 3 levels over my head. So, the current ATM straddle for DEC on the SPX is:
SPX at 1257
Dec 1255 straddle 17.00x18.40
How does this help us?
Also, I don't understand why if you think the SPX will hold up would you short the SGX (yes, this is the first time I've heard of this) and the futures. I know your not a credit spread'er, and would like to learn what you are trying to do, I just think we're a little lost...
sd
SPX at 1257
Dec 1255 straddle 17.00x18.40
How does this help us?
Also, I don't understand why if you think the SPX will hold up would you short the SGX (yes, this is the first time I've heard of this) and the futures. I know your not a credit spread'er, and would like to learn what you are trying to do, I just think we're a little lost...
sd