SPX Credit Spread Trader

Gatorplease,

I signed up for the mini-basket advisory but will not be auto-trading it. I'm looking at it purely from an educational point of view and I believe that is it's main purpose:

"This new advisory is for people who want to learn how professional traders manage overlapping and offsetting complex option positions, using spreads to hedge the beta-weighted delta risk of the portfolio"

So, to summarize, I'm always interested in observing other people's approaches to executing and managing market neutral strategies. This is the first advisory that has interest to me and hence the first advisory I have ever paid for. The $20p/mo is peanuts if it has genuine educational content...and can be cancelled at anytime. For the fee, you also get to bombard these "professional traders" with unlimited questions. So, in true leech-like fashion, I will be sucking every bit of information I can get from it. If it turns out there is nothing there worth having, I will cancel.

I don't think you can compare this advisory with a mutual fund for the above reasons IMO, but if the numbers don't add up for you, don't pay.

MoMoney.

Quote from gatorplease:

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
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Quote from momoneythansens:

Gatorplease,

I signed up for the mini-basket advisory but will not be auto-trading it. I'm looking at it purely from an educational point of view and I believe that is it's main purpose:

"This new advisory is for people who want to learn how professional traders manage overlapping and offsetting complex option positions, using spreads to hedge the beta-weighted delta risk of the portfolio"

So, to summarize, I'm always interested in observing other people's approaches to executing and managing market neutral strategies. This is the first advisory that has interest to me and hence the first advisory I have ever paid for. The $20p/mo is peanuts if it has genuine educational content...and can be cancelled at anytime. For the fee, you also get to bombard these "professional traders" with unlimited questions. So, in true leech-like fashion, I will be sucking every bit of information I can get from it. If it turns out there is nothing there worth having, I will cancel.

I don't think you can compare this advisory with a mutual fund for the above reasons IMO, but if the numbers don't add up for you, don't pay.

MoMoney.
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I hear you. And I agree - partially. There is a flip side to this. I've been trading the double double and index strategies for the last few months. The index directional has done well. The double double has stunk. I don't know about long term or even last year. I got in about 4 months ago.

There are a few things. You will find it difficult to get the quoted premiums without autotrading. They get better fills than are available retail.

If you are going to pay for an education, that's fine. Their language encourages you to do so. But to ignore the fees is a big NO, NO. Yes, I compare this to a mutual fund, hedge fund, investment style. The bottom line is what makes money. And you MUST take fees into account for that.

I also don't like the fact that everytime a negative post or question gets put up on the website, they take it down. I've seen a couple of posts removed. Makes me wonder what they're afraid of.

About leeching out info. I LOVE TOS. I highly recommend them. But I have not found RO to be as open, nor as willing to answer questions. Maybe you're a better schmoozer than I am. I have called a few times to question why strategies are done the way they are. I've gotten shuffled around and poor response time. Again, not horrible, but red flag worthy.

Maybe you're right. Watch for a few months and not autotrade. But then you can't sign up for autotrade later. Boy am I anxious.
 
Gatorplease,

OK. You're ahead of me. You've had experience with them before, I have not. Furthermore, I have no experience of any other advisory either so I have nothing to compare.

I won't be manually trading the strategies or won't want to auto-trade at a later date either so the fills issue is not a problem for me. I personally don't "get" auto-trading, I'd rather learn to fish for myself. However, I understand that circumstances of some people might necessitate otherwise. I suppose I'm just a control freak when it comes to my own money. At most, I'll paper trade the advisories but mainly I'll just be reading for any insight.

True, the bottom line is: what makes money, but I'm only after any new "ideas" that I might not have thought of before for the $20. If they don't provide any, I'm out.

The forums did seem to leave a little to be desired but I also saw some confrontational questions from people who seemed to think they knew more than the operators.

Appreciate the notes on your less than positive experiences to temper the marketing hype on the website - will bear it in mind.

Good luck to the both of us!

MoMoney.

Quote from gatorplease:

I hear you. And I agree - partially. There is a flip side to this. I've been trading the double double and index strategies for the last few months. The index directional has done well. The double double has stunk. I don't know about long term or even last year. I got in about 4 months ago.

There are a few things. You will find it difficult to get the quoted premiums without autotrading. They get better fills than are available retail.

If you are going to pay for an education, that's fine. Their language encourages you to do so. But to ignore the fees is a big NO, NO. Yes, I compare this to a mutual fund, hedge fund, investment style. The bottom line is what makes money. And you MUST take fees into account for that.

I also don't like the fact that everytime a negative post or question gets put up on the website, they take it down. I've seen a couple of posts removed. Makes me wonder what they're afraid of.

About leeching out info. I LOVE TOS. I highly recommend them. But I have not found RO to be as open, nor as willing to answer questions. Maybe you're a better schmoozer than I am. I have called a few times to question why strategies are done the way they are. I've gotten shuffled around and poor response time. Again, not horrible, but red flag worthy.

Maybe you're right. Watch for a few months and not autotrade. But then you can't sign up for autotrade later. Boy am I anxious.
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I have subscriptions to all their strategies (just for educational purposes). I've come to the conclusion (DOH!) that although they suggest trades for each and every strategy, all of the time, a wise trader is supposed to look at the market conditions and pick and choose the strategies to deploy -- and not use them all.

For 2006, we're sitting at near-10-year low volatility which means very low option premium. The moment volatility starts to trend up, it's the kiss of death for credit spreads and other premium selling strategies (unless they are very directionally oriented) -- something to watch out for!

Quote from gatorplease:

The index directional has done well. The double double has stunk.
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This is great advise...I thought long and hard and decided not to invest any greater amt into this strategy. I will keep it the same until/unless mkt dictates otherwise. I hope to learn more abt other strategies this year and most of all to quit doing STUPID trades :D

Quote from optioncoach:

. Ignore the risks of riding a great year by ratcheting it up higher and going for broke.
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Oopps seems like my quote was cut off but I actually made a typo. here is the correct version of the quote you ..... quoted:

"Do not ignore the risks of riding a great year by ratcheting it up higher and going for broke."

Sorry :)

Quote from DonnaV:

This is great advise...I thought long and hard and decided not to invest any greater amt into this strategy. I will keep it the same until/unless mkt dictates otherwise. I hope to learn more abt other strategies this year and most of all to quit doing STUPID trades :D

Quote from optioncoach:

. Ignore the risks of riding a great year by ratcheting it up higher and going for broke.
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I knew what you meant!:p

Quote from optioncoach:

Oopps seems like my quote was cut off but I actually made a typo. here is the correct version of the quote you ..... quoted:

"Do not ignore the risks of riding a great year by ratcheting it up higher and going for broke."

Sorry :)
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Quote from andysmith:

I have subscriptions to all their strategies (just for educational purposes). I've come to the conclusion (DOH!) that although they suggest trades for each and every strategy, all of the time, a wise trader is supposed to look at the market conditions and pick and choose the strategies to deploy -- and not use them all.
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Andy,

PLEASE share what you have experienced. I agree with your analysis, that you have to pick and choose. But that's not what they advertise. They're urging you to autotrade, there's no picking and choosing. They are charging for trading advice. They don't say, hey,, only put this trade on if you feel.........

I think the autotrade thing is very dangerous. And with this mixed basket thing RO is specifically encouraging autotrading. They are saying they will choose the strategy to play and you can follow it, trade it and learn.

I've chosen to subscribe and NOT autotrade. After discussion and my own personal experiences, I am willing to pay the cost for an educational experience (Initially, anyways). But I'm not willing to trust them to automatically place these trades. basically I'm paying for an education.

Can you tell us a little from what you've learned on the other strategies? Were they profitable?:confused:
 
Any VectorVest users in this group.

Been trying to play with some VectorVest strategies and scan for credit spread opportunities.

Murray
 
THis morning up move was a pullback to the former support/now resistance which evaporated pretty fast. The berish breakout on the SPX is still confirmed and next support level is 1235/1240 for now (1st Fib retracement).

As for JAN, my 1165/1175 strikes are still quite safe. Now looking at FEB and will look for 1160 strikes since with bearish bias in the short-term I want to be as far OTM as possible. Will llet you know if I close my JAN position on the uptick today.

Phil
 
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