Vertical Spreads for Aggressive Growth

Quote from ryank:

Will you go ATM at 130 or will you go CTM?
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I will be selling the 130/125 bull put probably. I'm slightly concerned about a breach of the 130 support. The ATM credit spread is easier to control.

On a different note, the jump today caught me off guard and I have almost no access to the markets during trading hours right now. Sure wish I could've taken advantage of it.:mad:
 
Quote from ryank:

The market is up 13 points right now, I might have to take back the drink offer :p. Here's to a breakdown in the afternoon like yesterday :D!
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Lets see tomorrow if you are going to offer the drink again:p
 
I will have some opportunity to trade tomorrow morning. If the CPI data comes in good then I will leg out of the GS trade that I haven't managed to get out of yet. I was expecting bad PPI data today that I thought would present some better opportunities for me.

OTOH, if the CPI comes in high then I'm expecting a full retracement to around 1260. All up in the air still though.
 
Quote from yip1997:

Lets see tomorrow if you are going to offer the drink again:p
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I chickened out yesterday near the close and got out at $1.05. Probably could have gotten out lower if I waited until after the close, the mid dropped down to .85. Oh well, didn't make as much as I could have if I would have gotten my fill last week but I am keeping a profit. I just hated to take the chance of a good winner turning into a loser right at expiration so I closed it. For you others that are still short the 1295, look for a drop now that I closed mine :p.

Edit: This is the cool thing about CTM spreads, I opened for $1.70 on 7/28. We are now 5 points from my short strike and the mid is at $1.55 (it has jumped around a lot this morning, saw it at $1.80 earlier). Assume I had a FOTM spread for .50 (typical for me) and now the market was 5 points away. I'd be looking about a $2 loss right now :(. I'm still feeling this strategy out but feel good about it so far.
 
Question for those of you hat trade OIH spreads. I normally trade them directionally with just puts or calls. ON your credit spreads do you find you can exit with profits and if so what % after a 4-6 point move which is common in this vehicle. Thanks
 
Quote from rbsanders:

Question for those of you hat trade OIH spreads. I normally trade them directionally with just puts or calls. ON your credit spreads do you find you can exit with profits and if so what % after a 4-6 point move which is common in this vehicle. Thanks
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As with everything concerning options, it depends. Depends on time to expiration, where you place your short strike, etc. I use ToS and can use their software to calculate what my spread value will be under different conditions. If you don't use ToS I'm sure your broker will have an options calculator that you can use to figure out values.

Just to give you a small example: I sold the Sep 125/130 puts for $1.40 on 8/14. OIH was at 134. It is now at almost 139 and the mid on the spread is .95 but we are still 30 days from expiration so lots can happen from here.
 
As with everything concerning options, it depends. Depends on time to expiration, where you place your short strike, etc. I use ToS and can use their software to calculate what my spread value will be under different conditions. If you don't use ToS I'm sure your broker will have an options calculator that you can use to figure out values.

Just to give you a small example: I sold the Sep 125/130 puts for $1.40 on 8/14. OIH was at 134. It is now at almost 139 and the mid on the spread is .95 but we are still 30 days from expiration so lots can happen from here


So you could sell for.45 profit at this point which at 20-30 contracts would not be too bad for a few days
 
Quote from rbsanders:

So you could sell for.45 profit at this point which at 20-30 contracts would not be too bad for a few days
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There would be some slippage so I would probably net about .35, but yes, not a bad profit for a few days. I don't have plans to buy it back yet though, holding out for it to move closer to 145.
 
Quote from ryank:

There would be some slippage so I would probably net about .35, but yes, not a bad profit for a few days. I don't have plans to buy it back yet though, holding out for it to move closer to 145.
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Thanks appreciate the info just trying to compare straight puts/calls versus credit spread. Have you tried any directional debit spreads on OIH
 
Quote from rbsanders:

Thanks appreciate the info just trying to compare straight puts/calls versus credit spread. Have you tried any directional debit spreads on OIH
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This is only my second trade on OIH so it is still pretty new to me. I tend to stick to credit spreads as I am more comfortable with them, I like to have theta working for me. It is just a personal preference.
 
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