SPX Put Spreads - Question

Palindrome said:
Good Point JackRab. That makes sense about the 1700, instead of 1690.

I guess the trade is really a protective trade if an atomic bomb goes off, and the Market drops to 1300 quickly (unlikely)...but if it did, I would be wiped out if trading unhedged.
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Okay, so your main strategy is shorting far OTM, but do somewhat of a hedge by buying a shorter term one... that's better than outright short, smart move... most people would just do the outright and not bother with risk.

Definitely go with the 1700 calendar in that case, since with a move to 1300 you would still get to keep the credit. The 1700 cal spr is worth next to nothing with SPX far far away from the strike...
As I and others mentioned... worst case is expiry of the 45 day put at 1700 (or 1690 in your case).
 
No I didn't... you made a buy-and-hold / investing comment... not a trading one.

Anyway, like I said... if the 100k in the account is only half utilized you're looking at 50% return. And okay, if you would utilize that same amount to buy about 10 ES futures with 50k margin and buy-and-hold for 7% return.... so thats about 70k a year.

Sounds like an awesome idea... let's all leverage buy-and-hold 10:1....
 
JackRab said:
No I didn't... you made a buy-and-hold / investing comment... not a trading one.

Anyway, like I said... if the 100k in the account is only half utilized you're looking at 50% return. And okay, if you would utilize that same amount to buy about 10 ES futures with 50k margin and buy-and-hold for 7% return.... so thats about 70k a year.

Sounds like an awesome idea... let's all leverage buy-and-hold 10:1....
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You really think you can make 50% return selling deep OTM puts?
You think it is that easy?

My point stands. You still don't understand it though
 
Chubbly,
My original post was just a target of 3%-5% return trading some spreads.

Everyone knows the market averages 7% buy and hold over extended periods of time.

We are discussing ways to make even more than that. Some people trade multiple systems to make significantly more money than 7% per year.
 
Palindrome said:
Chubbly,
My original post was just a target of 3%-5% return trading some spreads.

Everyone knows the market averages 7% buy and hold over extended periods of time.

We are discussing ways to make even more than that. Some people trade multiple systems to make significantly more money than 7% per year.
More...
I think there are bond investments that would yield you 3-5% with a lot less risk and less work.
 
Palindrome said:
Chubbly,
My original post was just a target of 3%-5% return trading some spreads.

Everyone knows the market averages 7% buy and hold over extended periods of time.

We are discussing ways to make even more than that. Some people trade multiple systems to make significantly more money than 7% per year.
More...

This why I don't understand either.
Options are very exciting, but over the long term do we know any real successful Option Trader who beat 7% a year ? I certainly don't.
 
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