thinkorswim for condors?
- Thread starter CloroxCowboy
- Start date
I gave up on SPX trades because of my inability to get good fills and now trade RUT exclusively.
But, this is not the same underlying asset as SPX and you must be willing to trade the more volatile index of smaller cap stocks. Are you?
The markets are still wide and these days, I don't love my fills. But they are still acceptable to me. I trade iron condors and patience helps, but the professionals are not as anxious to fill orders as they were prior to last year.
Mark
That's the answer I expected.
I wouldn't either, unless the benefit from owning multiple indexes had a statistical advantage large enough to offset fill loss. Even then, it would probably make me FEEL like I was losing every time, so it would have to be a large advantage.At this point, I'm not too interested in fighting the SPX MMs. How are the fills on NDX, OEX, etc? Any others where I have a good chance to get filled at the mid and still use this strategy?
Thanks for the discussion!
I'd have to analyze the data a bit to know if the extra volatility would turn me off. In general though, is the increased actual volatility reflected accurately in IV? If so, the thought process I use to set up ICs (using standard deviations and premiums received as a percent of total risk) would be identical and I can't imagine it making me any more nervous.
How do you submit your IC orders, as a batch or do you send separate verticals, strangles, or 4 single orders? I've tried submitting bundled ICs and sending the same IC as a pair of verticals, and I always get better, faster fills with verticals. Based of that, I'd have to assume that IC orders are still open-outcry right? If so and if you trade bundled IC orders, is there a specific reason?
Thanks!
Accurately? I don't know.
Agree that if you use std dev to establish orders, then higher IV already taken into consideration. Should be no problem.
My orders (through IB) are entered electronically and have no idea if they are subject to outcry. Sometimes the fills are instantaneous - meaning I probably could have done a nickel better and doubt there was time for outcry.
I prefer to enter the 4-way IC as one trade. Sometimes I leg the individual verticals. But to me, with the markets so wide, When I get one side, I don't really know the true market for the other side. I cannot afford to give up 20 cents from midpoint on each spread.
Used to get fills closer to midpoints on 4-way. Today am happy to get 15 or 20 cents from midpoints when trading ICs priced near $3.00 per.
Mark
Hmmm, that's interesting. I had assumed they were open-outcry, but if you get near-instant fills then maybe not. Unless IB managed to match you with another internal customer? I tried browsing the internal spreads a few times with ToS, but never saw anyone trading the opposite side of the range I like. The only ones available were NOT what I'd call conservative.
When I've legged verticals in the past on SPY, I got pretty consistent fills at or within a few points of the mid. If I could do the same with RUT it should work out well. Legging out when the market moves near my short strike is one way I like to manage ICs, so legging in feels natural and helps me keep things straight mentally. Although on the entry, I don't go overnight with only one leg open so I don't feel like I'm doing it to time the markets too much...mainly just for a slight execution edge and tracking purposes.
PS - "Accurately" is really not the best word...I should have said "consistently". As in, there is a fairly high correlation between RUT and other indices so I would not expect to see an IV spike/crash in RUT without a similar spike in SPX or NDX. I guess the question was related to demand and liquidity. You got the point though. All else being equal, using std devs will normalize a more volatile index.
When I've legged verticals in the past on SPY, I got pretty consistent fills at or within a few points of the mid. If I could do the same with RUT it should work out well. Legging out when the market moves near my short strike is one way I like to manage ICs, so legging in feels natural and helps me keep things straight mentally. Although on the entry, I don't go overnight with only one leg open so I don't feel like I'm doing it to time the markets too much...mainly just for a slight execution edge and tracking purposes.
PS - "Accurately" is really not the best word...I should have said "consistently". As in, there is a fairly high correlation between RUT and other indices so I would not expect to see an IV spike/crash in RUT without a similar spike in SPX or NDX. I guess the question was related to demand and liquidity. You got the point though.
All else being equal, using std devs will normalize a more volatile index.Quote from CloroxCowboy:
Has anyone acheived favorable bottom-line returns trading condors, butterflies, double-diagonals or other high commission strategies through ToS? I love their platform, customer service, etc, but the commissions seem like they would basically kill my "conservative" IC strategy.
What I define as conservative is PROFITING by ~20% of the margin requirement...IOW collect $0.30 on a front-month 1 point SPY spread and exit when you can get out for $0.10. You could also use later months and still collect the 20% profit, the timeframe is irrelevant for my question.
Considering that I would pay $140 in (round-trip) commissions on 10 IC lots, the MAX profit on my spread would be only $160!! The max risk is $700 + $140 = $840, so the max return / max risk is 19%. My conservative return is closer to 7% per trade. Granted, that's not terrible for what I call conservative trading...but obviously it could be far better at IB with lower commissions.
I'm really just curious how others feel about this, whether anyone would agree that condors are just too f*%#ing expensive to put on with $2.95 per contract fees?!
Thanks
I pay $1.00 per contract with no cancellation fees with TOS and I hear IB charges $0.70 per contract with a small cancellation fee. At the very least you should call TOS and ask them to eliminate the $9.95 fee. If they don't want to work with you there are plenty of options out there.
If you don't want to buy so many contracts you could always widen the strikes between your short/long puts and calls (keep in mind this will increase your negative vega) and of course you could trade an underlying with a higher price. I prefer the RUT for almost everything, but I sometimes use the SPX since the fills seem to have improved here lately. I'll use the SPY, IWM and DIA only when the lower price suits my needs.