SPX Credit Spread Trader

Thanks mo, I think that was a better version of my point than my muddled version. Sorry Sailing for not being clear today, that picture of Jessica got me all googly moogly.

I should have said better to get more for less, i.e. 100 spreads v. 1000 spreads when OX or TOS charge $1.25 per contract ($2.50 per contract roundtrip. So 1000 spreads is a better deal for OX and ToS than 100 SPX spreads but not for me necessarily. I still prefer SPX.

Again, the wide b/a spread is a downer and you may prefer to use XSP for smaller positions and I can understand. But with my volume, I think SPX is better despite the wide spreads.


Quote from momoneythansens:

Okay I lied, one last post:



Not quite:

100 SPX Spreads for $4000 (ROM: 4%)
1000 XSP Spreads for $5000 (ROM: 5%)

Figure 1$ per contract commissions:

One Way:

100 SPX Spreads for $3800 (ROM: 3.8%)
1000 XSP Spreads for $3000 (ROM: 3%)

Round-trip (for closing/adjusting)

100 SPX Spreads for $3600 (ROM: 3.6%)
1000 XSP Spreads for $1000 (ROM: 1%)

Commissions really are a killer when trading spreads that narrow. Return on margin net of commissions is probably a better apples to apples comparison IMHO.

MoMoney.
More...
 
HAPPY NEW YEAR to all my friends here in this journal. This journal has been a great place to get away from the pounding of the market and talk with many interesting people and learn a lot about trading.

Thank you to all who participate and force the exchange of ideas as I certainly have learned a lot and expect to continue in 2006.

I would like to keep the journal going for a while longer. I will try and re-summarize the strategy and approach to avoid people having to dig through everything and the tons of pages.

I hope you all had a good 2005 and may we all continue in 2006. I will be increasing my daytrading of futures and looking for more ways to hedge and improve my credit spreads on the indexes and will share everything as best as I can. On behalf of my wife Jessica Alba, we wish you all the best (oh shut up!)

Phil
 
I too want to wish all the happy little hitchhikers on this thread a safe, healthy and prosperous New Year.

I believe in giving credit where credit is due and want to especially thank Coach Phil for starting optioncoach thread on Yahoo...writing his book...and especially this thread. Although the money, risk, strikes and sweat were mine his idea of far OTM credit spreads on the SPX and the fellow travelers who have contributed and added so much inspired me to give it a go. Very seldom can you put a value to an idea but I'm $28,895 better off for this particular idea...in the months I've been doing these spreads. My cash at risk has ranged generally between $50,000-$110000...so although my return has been somewhat higher I've accepted the associated higher risk.

The other great idea was SKYPE from Murray which I can put $ value (saved)... thanks Murray.

Mo I have pasted your #1 and #2 important lessons in my notebook and RiskArb and everyone else who have given their precious time and valued thoughts a sincere thanks. I wish us all success in '06 and as of Friday have decided that I feel pretty good that this new year will be a good one.
Happy New Year!
 
Thanks Mo,

I was caught up in the apples to apples.... and not looking at the whole TREE!

I guess.... it follows my trading style. I usually deal in lot sizes of 10.... and place multiple positions. Time to wake up!

Thanks for the clarification!

And Donna.... let's get more of these journalist to join us on SKYPE! Maybe we could set up an arranged time to chat... weekly.

Happy New Year All and to All a Good Night,

M~
 
you guys not doing anything tonight...either:D

Quote from Sailing:

Thanks Mo,

I was caught up in the apples to apples.... and not looking at the whole TREE!

I guess.... it follows my trading style. I usually deal in lot sizes of 10.... and place multiple positions. Time to wake up!

Thanks for the clarification!

And Donna.... let's get more of these journalist to join us on SKYPE! Maybe we could set up an arranged time to chat... weekly.

Happy New Year All and to All a Good Night,

M~
More...
 
Quote from DonnaV:

you guys not doing anything tonight...either:D
More...

Just finished "You've Got Mail" and waiting for "Sleepless in Seattle". Not exactly the party guy.
 
Donna:

Thanks for the kind words and I also add to your sentiments for the others who have contributed.

As for your 2005 returns, congrats and great job. Not much advice for you except to remember to not let you get ahead of yourself and forget the risk. Large price swings are always possible so you certainly do not want to give back any of those wonderful profits. Ignore the risks of riding a great year by ratcheting it up higher and going for broke. One of the main reasons I start out slow in JAN and FEB is to develop a break from the year before and prevent myself from getting that false invincible feeling. Sort of a cooling period to bring me down to earth.

I am not necessarily directing this to you specifically, just want to take another opportunity to repeat this point.

best way to treat it is that 2005 is done and your slate is clean again. You have to start over and therefore, put last year's returns in the file and look with a fresh slate and clear mind to 2006. Except for the lessons learned and the profits, leave everything else behind and work hard again in 2006 for continued success.

Quote from DonnaV:

I too want to wish all the happy little hitchhikers on this thread a safe, healthy and prosperous New Year.

I believe in giving credit where credit is due and want to especially thank Coach Phil for starting optioncoach thread on Yahoo...writing his book...and especially this thread. Although the money, risk, strikes and sweat were mine his idea of far OTM credit spreads on the SPX and the fellow travelers who have contributed and added so much inspired me to give it a go. Very seldom can you put a value to an idea but I'm $28,895 better off for this particular idea...in the months I've been doing these spreads. My cash at risk has ranged generally between $50,000-$110000...so although my return has been somewhat higher I've accepted the associated higher risk.

The other great idea was SKYPE from Murray which I can put $ value (saved)... thanks Murray.

Mo I have pasted your #1 and #2 important lessons in my notebook and RiskArb and everyone else who have given their precious time and valued thoughts a sincere thanks. I wish us all success in '06 and as of Friday have decided that I feel pretty good that this new year will be a good one.
Happy New Year!
More...
 
Phil,

You mentioned a plan to re-summarize your credit spread strategy. Perhaps I can save you a bit of effort. I've been following the discussion in this journal for the past few months and have been keeping of running outline of the various nuggets that you've shared.

I thank you for all of the time and energy you have put into this discussion group. It seems the least I can do to contribute back a distillation of what you've so generously shared.

Hopefully you and the others readers of this journal will find the attached info useful. The .zip archive contains two files -- one is an MS-Word doc which is best viewed in "Outline" mode. The other is a PDF of the outline.

Happy New Year to all.

-- Rich
 

Attachments

That was extremely generous of you and greatly appreciated. I will take a look and see if I want to add anything or refelct on 2005 and make refinements. If so I will repost the edited version. I was going to do the walk through this week and perhaps you have saved me a great deal of time and for that I am grateful. I am sure that over the 7 months or so, some comments may have been appropriate under some circumstances and not under others so it is hard to generalize. If any comments seem contradictory I apologize and will be more than happy to try and clear up and discrepancies. Sometimes my own personal trading style evolves and what i say in JUNE is different than how I feel in DEC. But there usually is no right answer and I can only discuss MY approach which can be different than your approach and I am always open to different points of view.

ALWAYS remember that what you see here can only be described as MY approach for me, not necessarily the BEST approach for everyone. :)

Regards,

Phil

Quote from rws:

Phil,

You mentioned a plan to re-summarize your credit spread strategy. Perhaps I can save you a bit of effort. I've been following the discussion in this journal for the past few months and have been keeping of running outline of the various nuggets that you've shared.

I thank you for all of the time and energy you have put into this discussion group. It seems the least I can do to contribute back a distillation of what you've so generously shared.

Hopefully you and the others readers of this journal will find the attached info useful. The .zip archive contains two files -- one is an MS-Word doc which is best viewed in "Outline" mode. The other is a PDF of the outline.

Happy New Year to all.

-- Rich
More...
 
Has anyone taken a look at redoption's upcoming mini basket strategy????

They are charging $20/mo for the advisory (240/yr) I asked the following question:

""However, I am uncomfortable with buying blindly. On a $10000 account, you are charging 2.4% management fee up front, plus commissions. My guess is you are going to run up another 2.5% in commissions, at TOS rates. If you were a mutual fund, that would be quite a high front end load! What kind of return are you anticipating?"

If you are paying 5% up front, they've got to generate one heck of an income stream to make it worth while.

Anyone have any thoughts??

PS HAPPY NEW YEAR
 
You must log in or register to reply here.
Back
Top