This is a Vertical Credit Spread I am about to trade..
- Thread starter Con1991
- Start date
rb7 was the first to notice the problem and I knew the problem already from the screenshot in the first post
This is a paper trade meaning it's not real it's just simulated and if this is what you meant that you got filled before than you will be disappointed when this does not work in a live trade
I remember way back when I started using TOS I got filled on a $5 wide SPX put spread for 5.05 basically free money but I knew something was wrong There is no way the MM will give away free money
Another time I was trying to get out of a $25 wide deep ITM NDX live trade trade and would not get filled even at 25.10
Also after hours prices are way off and also deep ITM prices are wrong since there is no volume or open interest basically no one is trading it that far ITM
Looking at the same strikes and expiration today on TOS a few days later than your post this spread is quoting at 101.70 for the mid price so you are trying to sell this spread for 1.70 more than the width of the spread that's not going to be filled in a live trade and you also need to have 10K in margin
Using Ondemand and going back to Wednesday the day of your post this spread was bouncing around 95.45-97.90 so those prices are closer to reality and you may still have to give up maybe 10-20 cents for slippage
Basically there are no risk free trades except on paper trades
This is a paper trade meaning it's not real it's just simulated and if this is what you meant that you got filled before than you will be disappointed when this does not work in a live trade
I remember way back when I started using TOS I got filled on a $5 wide SPX put spread for 5.05 basically free money but I knew something was wrong There is no way the MM will give away free money
Another time I was trying to get out of a $25 wide deep ITM NDX live trade trade and would not get filled even at 25.10
Also after hours prices are way off and also deep ITM prices are wrong since there is no volume or open interest basically no one is trading it that far ITM
Looking at the same strikes and expiration today on TOS a few days later than your post this spread is quoting at 101.70 for the mid price so you are trying to sell this spread for 1.70 more than the width of the spread that's not going to be filled in a live trade and you also need to have 10K in margin
Using Ondemand and going back to Wednesday the day of your post this spread was bouncing around 95.45-97.90 so those prices are closer to reality and you may still have to give up maybe 10-20 cents for slippage
Basically there are no risk free trades except on paper trades
Yeah, with paper trades, anything goes. But to give the OP the benefit of the doubt, that pic could be just a demo showing how to enter it rather than the actual trade setup.
Heh. I recall showing something similar to a friend of mine: a 0DTE SPX trade - something like 100x min-width spreads right before expiration, where I'd get in and then right back out with a couple of cents "profit". Worked great on paper...
Not quite true. You can often get filled for 0.00 on narrow low-delta flies right before expiration, or when the underlying is extremely volatile - and since I'm signed up for TradeStation's "Salutes" program (free trading for vets, active duty, and first responders), they're risk-free (well, OK, except for a couple of cents worth of exchange fees.) I've never had one pay off at anything near max - theoretically, it could happen, but hasn't yet - but it's 0 risk vs. a $100 return.
Example in WPG, when they were about to default on a debt payment; actually traded.
6/8/2021 $4.77 BTO WPG 210618P3 / 210618P2.5 / 210618P3.5 $0.00 Filled for zero.
6/8/2021 $4.75 STC WPG 210618P3 / 210618P2.5 / 210618P3.5 $0.05 $5.00 INFINITE return!
Another live example in SPY (expired worthless):
6/11/2021 $423.70 BTO SPY 210611P418 / 210611P420 / 210611P422 $0.00 Free $2-wide fly 2SD out, opened 1/2 an hour before the close; a lottery ticket, with a $200 max return.
6/8/2021 $4.77 BTO WPG 210618P3 / 210618P2.5 / 210618P3.5 $0.00 Filled for zero.
6/8/2021 $4.75 STC WPG 210618P3 / 210618P2.5 / 210618P3.5 $0.05 $5.00 INFINITE return!
...
Forget Jello, there's always room for infinite return!
Not familiar with that trade. Is that when you eat some "sugar free" Jello and then spend a couple of hours on the toilet crapping out more volume than you thought possible? Inquiring minds and all that.
It's the one I just quoted from you. You paid 0, made 5 bux, so infinite return.
I just didn't know how Jello fit in the picture. But yeah, it was an interesting experiment: I put out some number of bids for WPG (10 or 100, I don't recall) and got 1 filled, then offered it back out for a nickel and eventually got that filled too. Obviously not something that was going to happen in volume - but my interest was mostly in seeing if this kind of inefficiencies existed.
TBH, I'm rather skeptical about the OP's ability to fill that spread, especially that far ITM - but based on my experience with these silly trades, I'm unwilling to say that it's impossible. Just for fun, I put one of them on a couple of days ago; it hasn't filled in the last couple of days, but it still might. Whether it does or not, I'm not risking anything.
Oh sorry about that. I'm sometimes referencing weird Americana. Thought you remembered the Jello thing.
That's a different scenario than the OP
Not sure how is this 2SD out when the 422 is just about 1 point away from ATM 423.70 but it has a better chance of filling near 0 at expiration and with quick crash near the close you may get something out of it if the 422 goes ITM and this is a fly so the 2 spreads nearly cancels each other out but at least there is trading around it
Compared that to the OP which is more than 3 SD away trying to get a fill on a 100 wide spread for 100 where very few if anyone is trading
Wait a minute I just found the perfect trade It's better than free The NDX ATM 19 AUG put fly 12950/12940/12930 is quoting for 1.50 credit You can make 150 bucks no matter where it expires Too bad unfortunately it's after trading hours so the quotes are not real
Wow. Really?
Since you've missed the point: the chances of filling a risk-free fly are about the same as the chances of filling a risk-free spread (i.e., very low but present.) Both of them demonstrate, in exactly the same way, that your statement about "no risk free trades" is false. That doesn't mean, or guarantee, that the NDX spread will fill - but since it costs nothing to find out, I don't see a problem in playing around with it.
As anyone who understands the change in risk over time knows, the closer to expiration, the narrower the distribution - and when that fly filled, the body of it was at the 2SD line on the risk graph.
Again, for those who are slow on the uptake: the principle behind the trade is far more important than the exact numbers. Based on your belief - which is untainted by little things like actual practice - it would be impossible to fill a fly for 0, since there are "no risk free trades". Me, I'll take reality over fanaticism any time... so I don't really care what you believe or disbelieve. Your ham-handed attempts at irony notwithstanding, the trades I quoted above came from my trade log - and I haven't done any paper trading in years.