SPX Debit Spread Trader

.sigma

.sigma

Going to start a journal piggy-backing off optioncoach's infamous journal but instead of credit spreads this journal will focus primarily on debit spreads (usually verticals, sometimes calendars/flys) in the SPX. I will also trade /ES and SPY and will only sell premium if I see a great set-up, but other than that I will focus on debit verticals (bull calls and bear puts.

I'm going to trade throughout the term structure. Front month I will focus on weekly trades and in the far out months I'll look to buy deep ITM debit spreads for longer term swing trades.

Starting balance: $6,666.33
 
With SPX at all-time highs and IV at 12% and IVR at 6% I thought its a prime time to start a journal like this. To kick off 2020 I believe we will see vol being bid kind of similar how we ended 2018.

My bias has been overall long delta, but I adapt with what the market gives me. I am long delta right now in my other account and will continue to buy long delta in this account until we get a decent sell-off which I think we will see in this month (the latter part) same as what happen a year ago. Who knows? We shall see and I will position myself accordingly.

I may sell some credit spread to adjust my delta to my overall account to get the desired beta I prefer which is determined on current market bias, but overall I will be a net buyer of premium. I may also leg into positions but this is rare for me.

I will be risking on average 5% per trade. I do not manage my spreads at a predefined loss, I will close out if I am totally wrong on direction for weekly trades but on longer time frame trades I might hedge with $SPY or futs.
 
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