SPX Credit Spread Trader

For Feb, I had 1195/1210P 1190/1205P, 1325/1340C for total of 8 contracts. All of them expire worthless. The average credit I got for them was $0.50/contract.
 
This What I had:

SPX 1225/1215 P->$0.70
SPX 1320/1330C->$0.55
OEX 590/595C->$0.75
OEX 560/555P->0.55
RMBS 45C ->$1.10
SNDK 90C ->0.70
RIMM 70/75C ->$0.80
RIMM 60/55P ->$0.85

If everything goes well everything would have expired worthless except for RIMM I had total credit of 1.65 and I covered the call for 1.20 debit => 0.45 credit

Which gives me a total of:

OEX ->$1.30
SPX ->$1.25
RMBS->$1.10
SNDK -> $0.70
RIMM ->$0.45

Total credit of: $4.80.

My average nbr contracts is: 10

This month I will stick mostly with SPX and OEX unless I can find very good FOTM stock and the technicals are in my favor.

I wish everyone a good March trading.
 
For those who wanted to know how I did with my March RUT770/780.

I decided to close it today:

I had 10 RUT 770/780C for 1$

I hedged it by buy 8 IWM74 @ 0.45

This morning, I close IWM for 0.80 => credit of $280

This afternoon, I close 770/780 for debit of 0.70 => credit of 0.30

Net return:

IWM Hedge=$280
RUT Spread=$300

Total: $580 + comissions

Reason for closing:

1) I was concerned about the stock market being strong today when It should be crushed with bad earnings and economic news.

2) RUT was getting close to it's Resistance. Any break over it would jeopardize my trade. RUT was too close from my short 770.

580$ in two weeks, I will take it everyday. It's not the time to be greedy.
 
Good money for two weeks.

Have you formed an opinion yet on whether you'll keep trading the RUT or is it too early.

Quote from piccon:

For those who wanted to know how I did with my March RUT770/780.

I decided to close it today:

I had 10 RUT 770/780C for 1$

I hedged it by buy 8 IWM74 @ 0.45

This morning, I close IWM for 0.80 => credit of $280

This afternoon, I close 770/780 for debit of 0.70 => credit of 0.30

Net return:

IWM Hedge=$280
RUT Spread=$300

Total: $580 + comissions

Reason for closing:

1) I was concerned about the stock market being strong today when It should be crushed with bad earnings and economic news.

2) RUT was getting close to it's Resistance. Any break over it would jeopardize my trade. RUT was too close from my short 770.

580$ in two weeks, I will take it everyday. It's not the time to be greedy.
More...
 
When the technical indicates a Put or Call Spread possibility, I will jump on it. This experience was a good one.

I decided to hedge because it was oversold at that time. It was good that I benefit from both Hedge and Spread

But based on one year data, I can tell you that 70 points from the short strike should be pretty safe for Rut with 30 days to expiration.

I will analyze the overbought/oversold conditions and will trade it as necessary



Quote from rdemyan:

Good money for two weeks.

Have you formed an opinion yet on whether you'll keep trading the RUT or is it too early.
More...
 
I am not really thrilled about RUT. There is no 5-point spread. You have to go 10-point or more.

Quote from rdemyan:

Good money for two weeks.

Have you formed an opinion yet on whether you'll keep trading the RUT or is it too early.
More...
 
Quote from piccon:

When the technical indicates a Put or Call Spread possibility, I will jump on it. This experience was a good one.

I decided to hedge because it was oversold at that time. It was good that I benefit from both Hedge and Spread

But based on one year data, I can tell you that 70 points from the short strike should be pretty safe for Rut with 30 days to expiration.

I will analyze the overbought/oversold conditions and will trade it as necessary
More...

piccon, great trade to benefit from both the hedge and spread and I hear what you are saying in regard to the small caps looking like they have room to run.

I started trading the RUT this month and am very glad that I found this thread, there's a lot of great information here and it also lead me to other great threads, such as risk's combo to fly.

I just let a RUT 750/760 C spread expire today (never got filled on the put spread I tried to place later on and I am brand new to this so no big deal). Pretty nice feeling but I was considering adjustment at the beginning of the month in regard to how close RUT was to my short strike ~ 15 pts. Something tells me that I should have put on an adjust and got lucky, but I was looking for penetration thru 740.

I am going to try and figure out how you arrived at your hedge (% wise), sounds like it was immediate and not an adjustment, but glad to see you are trading the RUT as well.

I traded the SPX this month as well and that bear call happily expired 40 points out, but the RUT is a different animal to me.

Great trading and happy weekend, sd
 
Well...for those of you interested in the legging in aspect here is an update/summation of my March credit spreads:

Feb 2 BTO 50 spx 1175P @ 2.10 -10500
Feb 8 STO 25 spx 1190P @ 3.60 +9000
Feb 14 STO25 spx 1195P @ 2.95 +7375
Feb 14 BTC 25spx 1195p @ 1.90 -4750
Feb 16 STO 25spx 1190p @1.15 +2875

Total credit put side 4000/50 or .80 per contract
Feb 16 STO Call credit spread 1335/1350 net credit .55 so my Mar IC is 1.35 (doesn't include the spec/hedge)

so this month for me legging in didn't work as well as in Jan or Feb where my net credit was 1.85. The mistake was in not selling the entire 50 contracts on Feb 8th for the credit of 3.60..as it turned out I probably could have gotten .80 on the 2nd

In my defense at the time I still felt we could have some volatility in the market with some big down days and I felt having the single puts out there was a good thing...but I think the real truth is I didn't have the confidence/courage of nailing down the spread...basically trying to hedge my bets. lesson learned is...take a deep breath..legging in is certainly OK but at some point you still have to take a leap of faith and place your bet...so while legging in is ok don't try to get too cute!
 
Donnav,

I am trying to see how I can use your strategy for Butterfly purpose.

When the market is going up like crazy, I would buy the two exterior wings Strikes and then Sell the middle Strike on big down day.

The two wings can make money on down day and then When adding the Middle, You will end up with a net credit.

I am going to experience it and I will let you guys know how it worked out.

Good Weekend

I am going to miss Monday trading though

Quote from DonnaV:

Well...for those of you interested in the legging in aspect here is an update/summation of my March credit spreads:

Feb 2 BTO 50 spx 1175P @ 2.10 -10500
Feb 8 STO 25 spx 1190P @ 3.60 +9000
Feb 14 STO25 spx 1195P @ 2.95 +7375
Feb 14 BTC 25spx 1195p @ 1.90 -4750
Feb 16 STO 25spx 1190p @1.15 +2875

Total credit put side 4000/50 or .80 per contract
Feb 16 STO Call credit spread 1335/1350 net credit .55 so my Mar IC is 1.35 (doesn't include the spec/hedge)

so this month for me legging in didn't work as well as in Jan or Feb where my net credit was 1.85. The mistake was in not selling the entire 50 contracts on Feb 8th for the credit of 3.60..as it turned out I probably could have gotten .80 on the 2nd

In my defense at the time I still felt we could have some volatility in the market with some big down days and I felt having the single puts out there was a good thing...but I think the real truth is I didn't have the confidence/courage of nailing down the spread...basically trying to hedge my bets. lesson learned is...take a deep breath..legging in is certainly OK but at some point you still have to take a leap of faith and place your bet...so while legging in is ok don't try to get too cute!
More...
 
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