Doh! Just a beginner here. Always doing things backwards. Your book next 
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
I am glad RUT has finally turned bearish. Coach, how about having a nice discussion on various indices available in US market and how they are corelated. Maybe even go into sector indices like spyders,diamonds, holders and come up with strategies to hedge across sectors. I am trying to get the big picture here.
I just finished elder's book 'trading for a living', i gained some insight on how political,economic cycles affect the markets.
I just finished elder's book 'trading for a living', i gained some insight on how political,economic cycles affect the markets.
Well after Cottle I hope it is not a step backwards LOL....but if you get it, you get it....
Quote from momoneythansens:
Doh! Just a beginner here. Always doing things backwards. Your book next
I am open for anything
Concur on RUT, but the jury is still out. I have a diag on from 2-3 weeks ago that was getting a little far out on the curve.
As for correlation:
OIH, XLE, and TLT seem to have decent option volume and the chance of getting decent fills. For the most part they're not extremely correlated to the indices (but sometimes they sync up). They can move though (except maybe TLT) so be careful.
The internationals aren't much help because all the equity markets tend to move together.
If they ever get off their duff and list options on GLD then we'd have another choice.
The only ways I see to "un-correlate" your trading is to,
1) trade different equity strategies on different time frames (options, swing, long-term investing)
2) work the fixed income market, and
3) bring commodities into the mix.
If I only had the time..
As for correlation:
OIH, XLE, and TLT seem to have decent option volume and the chance of getting decent fills. For the most part they're not extremely correlated to the indices (but sometimes they sync up). They can move though (except maybe TLT) so be careful.
The internationals aren't much help because all the equity markets tend to move together.
If they ever get off their duff and list options on GLD then we'd have another choice.
The only ways I see to "un-correlate" your trading is to,
1) trade different equity strategies on different time frames (options, swing, long-term investing)
2) work the fixed income market, and
3) bring commodities into the mix.
If I only had the time..
Hi Coach,
I am a new member to this thread, and ET for that matter. I subscribed to ET just so I could have full access to your journal.
I have read the first 1050 messages of this thread, but I must admit that I skipped from there to here about a month ago due to all the repetition in the questions. I must say you must be a very patient person in order to continue answering the same posts over and over - such as "what is the difference between 10 wide and 15 wide?". That one even started to grate on me a little.
Thank you for doing this. I have learned more about credit spreads over the last few weeks reading this thread than all my books and research combined.
Question: With this strategy, how much time do you need to spend in front of your computer during the day? I know it varies depending on how close the index is to your short positions, but I am curious to know.
Also, do you still do your radio show on Wednesday?
Thanks,
-Cash
I am a new member to this thread, and ET for that matter. I subscribed to ET just so I could have full access to your journal.
I have read the first 1050 messages of this thread, but I must admit that I skipped from there to here about a month ago due to all the repetition in the questions. I must say you must be a very patient person in order to continue answering the same posts over and over - such as "what is the difference between 10 wide and 15 wide?". That one even started to grate on me a little.
Thank you for doing this. I have learned more about credit spreads over the last few weeks reading this thread than all my books and research combined.
Question: With this strategy, how much time do you need to spend in front of your computer during the day? I know it varies depending on how close the index is to your short positions, but I am curious to know.
Also, do you still do your radio show on Wednesday?
Thanks,
-Cash
Thanks for the kind words. As for time, once you put a position on, you can simply check once a day in reality as long as the index is still far from your short strikes. But it is still good to follow the index daily so you are in touch. But as people here can tell you, you do not need to spend hours each day watching the SPX move around a 2 point range. I have the screen open all day because I am trading but I do not look at my positions more than once a day, I simply look at what the SPX is doing.
Happy to "Pay it forward"
I don't have the experience or writing skills that you coach and others have so whatever contribution I can make to our little group...happy to do so.again, credit where credit is due, as I've said I do look at Helene Meisler who writes for "Real Money" (which I don't like in particular...but subscribe to for her) she uses various oscillators to give a read on whether the mkt is overbought or oversold and for the last year or so quite accurate. It ties in nicely to what I do with the spx...as I'm learning to use it as a part of my over all "sense" of the mkt.
Anyway what triggered the Buy of the 1175 Mar was the negative productivity report...I knew immediately that was not a good thing...in looking at the OI there was quite a bit at 1175 and decided that would provide a good "backstop" but haven't sold the short as yet. In the next two weeks we should see some vol so I will have opportunity and don't want to pull the trigger too soon. Probably will sell in the middle of next week either the 1190 for 15pt spread or I may go as high as 1200 for 25 pts.
What I've been looking to do is add a put at 70%prob of touching to the short put in a 1:5 ratio...or if I do an IC add a call as well at abt 70%prob of touching. This would be not so much for a hedge as a positive play on the market. Most of us (especially those of us that are inside the strikes of coach
) have either had to adjust or at least worry...I know almost every month one of my shorts have been threatened so why not make money on that threat? I'm going to throw the put/call for march on my paper money account because we will be on vacation exp. week in mar and I don't want to have to be tied to the computer. but will give a report as to how it worked. Generally when I add the short put/call will throw on the "hedge"oh...I actually got the put at 2.10 (.10 below my "limit") LOVE those guys
