SPX Credit Spread Trader

Quote from DonnaV:

Did you put on your bull put side yesterday? You may be right about a run down but right now there is more pressure to the upside and time (and premium)is running out for a Mar Put credit.
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I couldn't get a fill on the 1210p/1220p yesterday, with time ticking away I'm not sure if I want to go higher and chase premium. I may wait out March on the put side and look for April positions. Right now I have a 1330c/1340c position and I need the clock to tick a little faster for this one!

ryan
 
No I didn't do the put side. I'm still waiting for the "shoe to drop" so to speak. The stochastics are showing way overbought conditions and I don't want to take a put side and watch as the market relentlessly drives against me for the next week or so. BTW. what technicals do you use and what settings ? .... I generally refer to Slow Stochastics and Stochastic RSI to get an idea of buying/selling pressures. Sometimes I toy with the RSI @ 45 days and look at a 60 day chart ... yesterday we drove down through the .8 mark but it seems we now we're driving back to retest this mark. If we do break it and then recurse, I think that could be the end of this current run-up.

Quote from DonnaV:

Did you put on your bull put side yesterday? You may be right about a run down but right now there is more pressure to the upside and time (and premium)is running out for a Mar Put credit.
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March straddle is around 27 .... using coach's double straddle rule you'd be looking at the 1230p/1220p right ? .... just kidding .... I'm looking at the put side also and would agree that even 1230 looks dangerous !

Quote from ryank:

I couldn't get a fill on the 1210p/1220p yesterday, with time ticking away I'm not sure if I want to go higher and chase premium. I may wait out March on the put side and look for April positions. Right now I have a 1330c/1340c position and I need the clock to tick a little faster for this one!

ryan
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Quote from Synaptic:

No I didn't do the put side. I'm still waiting for the "shoe to drop" so to speak. The stochastics are showing way overbought conditions and I don't want to take a put side and watch as the market relentlessly drives against me for the next week or so. BTW. what technicals do you use and what settings ? .... I generally refer to Slow Stochastics and Stochastic RSI to get an idea of buying/selling pressures. Sometimes I toy with the RSI @ 45 days and look at a 60 day chart ... yesterday we drove down through the .8 mark but it seems we now we're driving back to retest this mark. If we do break it and then recurse, I think that could be the end of this current run-up.
More...

I have to admit I use very little...maybe no technical indicators...no stochastics at all. I like the 10 day overbought/oversold oscillators to give an indication of when we are in that territory...also eyeballing the charts and looking at coach's charts...I guess its a gut feeling that I ultimatelly act on based on ton's on tiny and maybe insignificant clues. I do believe while the market has a very short term memory...history does tend to repeat itself. Also macroeconomically.... is the market expensive compared to how the other economic indicators tell us the economy is doing? or is it reasonable. Right now I think the market is reasonable over-all and the economy good...as as I mentioned before, March is springtime and "hope springs eternal" thus March set will probably be higher than Feb. I use the probability of expiration function on the TOS platform and basically play the probabilities. So it is nothing mechanical nor quantifiable . Sort of silly I guess, the only comfort I take is that Natenberg in his book said if you have a good "feel" for the market....use it. He was not dismissive of "feel" :)
 
Quote from DonnaV:

I use the probability of expiration function on the TOS platform and basically play the probabilities.
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TradeKing has a cool probability calculator that I just found today. I haven't funded my account there though (still with OX) as they still show 0's for SPX delta and IV. I first complained to them about 3 weeks ago. They are aware of the problem and are working on it but they don't know when it will be fixed. Other than that problem, the site looks and works pretty good I think. We will see if/when I ever fund the account how I like it though.

ryan
 
Quote from DonnaV:
. Sort of silly I guess, the only comfort I take is that Natenberg in his book said if you have a good "feel" for the market....use it. He was not dismissive of "feel" :) [/B]
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Donna,

Who is Natenberg and what book has he written? Is it all about credit spread trading? Could you give me some names of good books on credit spread trading?

DAVE
 
Quote from daved275:

Donna,

Who is Natenberg and what book has he written? Is it all about credit spread trading? Could you give me some names of good books on credit spread trading?

DAVE
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I haven't read any of Natenberg's work but for credit spreads I would recommend
The Complete Guide to Option Selling
by James Cordier, Michael Gross

They focus somewhat on commodities but not that much, I found it very relevent and easy to follow/read.

ryan
 
Quote from ryank:

I haven't read any of Natenberg's work but for credit spreads I would recommend
The Complete Guide to Option Selling
by James Cordier, Michael Gross

They focus somewhat on commodities but not that much, I found it very relevent and easy to follow/read.

ryan
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Thanks Ryan.

DAVE
 
Coach,

Wondering what your Crystal Ball is telling you as to the direction of this market ?? .... I had it marked down as turning over today and heading south .... boy was I wrong (so far). See any particular patterns in the charts at this time ?
 
Quote from daved275:

Donna,

Who is Natenberg and what book has he written? Is it all about credit spread trading? Could you give me some names of good books on credit spread trading?

DAVE
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Sheldon Natenberg "option pricing and volatility" everyone and their mother recomends him for an understanding of how the Greeks work in the pricing. I hesitated for awhile and more recently read it, sorry I didn't read it sooner. I really liked the way he presented probabilities and his explanations for gamma, vega were very understandable. Although the last edition is 1994 its very relevent to an understanding of how options do work. Highly recommended as I said by EVERYONE & THEIR MOM's
 
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