SPX Credit Spread Trader

[piccon]

I have 2 years monthly moving of RUT and I decided after looking at it that 770 would be safe for februry-March period. Timing is important too in spread trading.

My 6% -10% returns come from different areas. For the last two months I have been making money on RIMM, SNDK, RMBS, OEX, SPX.

RIMM and SNDK are extremely volatile but entry is the key. I always complete the condor and my entry point is based on technical analysis. I don't enter PUT and Calls spreads at the same time unless the TA allows me to do so. I always have an exit strategy in case the market goes against me.

Return is on Margin.

Quote from momoneythansens:

Ahh, congratulations - 50% of profits in one day. If the market had moved against you though you could already be down 50% LOL. Perhaps think of it that way? RUT is nearly twice as volatile as XEO for example.



Yes good fills. Listed on ISE,CBOE and AMEX I believe. 10 point wide strikes are a little limiting given the size of the index. Similar ROI for probability compared to XEO IMO. Good for diversification though.



Minimum? Famous last words Is that return on account or margin? Good luck though and congratulations on results thus far.

MoMoney.

 

[Miked0801]

Does it work on individual stock as well? (AMD short 40 feb puts...)

Lol

 

[El OchoCinco]

If you always do Iron Condors then 6 - 10% is not difficult. Look at the return of IC for MAR not counting the BOX adjustment cost.

EDIT: But of course you will not be able to do it every month, there is always an adjustment month out there

And sorry my contrarian indicators do not seem to work on stocks. They know I have not been in that market for some time so they ignore me completley

 

[momoneythansens]

There was no need to dignify my thinly veiled sceptisicm with a response! I'm sure you have everything under control though I do think your minimum projections might be a little optimistic unless the market continues it's relentless sideways shuffle in perpetuity. In future, best to ignore my ramblings but congratulations once again!

As just mentioned, I'm just cranky on one of my positions so engaging me in debate at this time will not be fruitful and I would also like to take this opportunity to say two further words: GOOGLE SUCKS

Quote from piccon:

I have 2 years monthly moving of RUT and I decided after looking at it that 770 would be safe for februry-March period. Timing is important too in spread trading.

My 6% -10% returns come from different areas. For the last two months I have been making money on RIMM, SNDK, RMBS, OEX, SPX.

RIMM and SNDK are extremely volatile but entry is the key. I always complete the condor and my entry point is based on technical analysis. I don't enter PUT and Calls spreads at the same time unless the TA allows me to do so. I always have an exit strategy in case the market goes against me.

Return is on Margin.

 

[piccon]

This is tough. I was even trying 580/585 and 570/565. I still don't have the Balls to do it. S&P100 has been stronger than S&P lately and it's MA(50) is at 577. I am going to wait for Tuesday Wednesday to see if I can get something out of it.

I alredy have 590/595 for 0.75 and 560/555 for 0.60

OEX is great for fast money but I don't want to overexpose my capital right now.

Anyway, good luck MO. I will see If I can get some OEX 2 or 3 days to expiration.

Quote from momoneythansens:

I'm still in the process of back testing...but will definitely start forward testing your calls as of next month. Do I have to pay?

As per the fund mentioned earlier, in addition to directional plays can you arrange for the market to sit still instead?

I have a 565/575/585 XEO fly and it's right at the sweet spot but a week too early. Grrrrr...that's why I'm cranky.

 

[rdemyan]

Hi piccon:

I've traded the RUT and you're right the premiums can be pretty good.

However, let us know your experiences when you try to get out of a RUT credit spread prior to expiration. My experiences and those of others I know have not been good. The RUT MMs can be very tight-fisted and typically command quite a bit above the mid to get out especially as you get closer to expiration. I have noticed that getting in can be similar to the SPX when I was placing trades 7 to 8 weeks before expiration. But they always made me pay dearly to get out.

Anyway, good luck with the trade and please let us know your experiences with the RUT.

Quote from piccon:

Coach,

I heard people talking about RUT; I never traded it; I have been working with OEX and SPX using my statistical and technical analysis. So far everything has been great. I support my technique with your hedging.
I have been making money in both hedge + spreads.

Yesterday I tried the RUT MAR 770/780 Call and I am already up 50% on this trade.

Everything has been going well on all SPX, OEX and now I add RUT for Small CAP. I found that RUT give very lucrative premium. I am waiting for later today to write the PUT Spread since RUT is getting oversold. I am just waiting for 1$ premium.

1$/Call + 1$/Put=2 for a margin of a spread of 10$=20% possible return. That's how lucrative RUT is.

Thanks a lot to this board. Now I can talk about 6 to 12% return a month at a minimum.

God bless

 

[piccon]

Hopefuly I won't have to get out. That's my objective: let it expire worthless. That's the reasonning behind FOTM. If ever RUT starts to be strong, I will buy some close to the short strike for hedging. For the last two years, only twice, the 20 trading day period exceeds 62 points. Maybe I will have to adjust but for now RUT is pretty week compare to S&P and DOW

I will let you know though.

Quote from rdemyan:

Hi piccon:

I've traded the RUT and you're right the premiums can be pretty good.

However, let us know your experiences when you try to get out of a RUT credit spread prior to expiration. My experiences and those of others I know have not been good. The RUT MMs can be very tight-fisted and typically command quite a bit above the mid to get out especially as you get closer to expiration. I have noticed that getting in can be similar to the SPX when I was placing trades 7 to 8 weeks before expiration. But they always made me pay dearly to get out.

Anyway, good luck with the trade and please let us know your experiences with the RUT.

 

[gatorplease]

I'm watching the charts along with the rest. But take a look at Open Interest in Opts. With exp next week, the best way for MM to shake everyone out is at 1275. The last few days before opex gyrations begin (about Wed before) I always look at OI to get an idea who they want to take out.

They've done a great job over last 2 days.

I placed a quickie iron condor on Wednesday, 1230/1240-1280/1290. for 2.10. I anticipate SET around 1273. That's all I have to say about that (In my best Forest Gump voice!)

 

[piccon]

Why do you want to hedge a position already closed?

Quote from optioncoach:

Ok.. can do! Here ya go...


The market is gonna be wild this week, I am considering hedging my already closed FEB positions to protect myself from the wild swings we will see going into FEB expiration.







[there that ought to keep the market quiet for a week]

 

[piccon]

Isn't this too risky?

I had 1320/1330 long ago and it's only Tuesday or Wednesday that I completed the condor with 1225/1215 . That's the only spot I felt comfortable right at the MA(200).

Good luck anyway.

Next week I am going to sit back and watch. I am looking forward to entering some MAR PUT Spreads for all the calls I have already written.

Quote from gatorplease:

I'm watching the charts along with the rest. But take a look at Open Interest in Opts. With exp next week, the best way for MM to shake everyone out is at 1275. The last few days before opex gyrations begin (about Wed before) I always look at OI to get an idea who they want to take out.

They've done a great job over last 2 days.

I placed a quickie iron condor on Wednesday, 1230/1240-1280/1290. for 2.10. I anticipate SET around 1273. That's all I have to say about that (In my best Forest Gump voice!)