Vertical Spreads for Aggressive Growth

[jeffm]

What really struck me about John's post was this, " requires that you have your nose in the screen, be able to predict the direction very well, have a pretty good idea as to whether the move in the underlying that is affecting your spread will continue in that direction"

I'm thinking, "well damn! If you have those kinds of skills, you can't help but make money". The problem is most traders don't have what the advisory service says they need. My advice would be stop trading until you settle on a strategy that better matches your time frame, predictive ability, account size, etc. Maybe FOTM credit spreads will turn out to be your bag. Perhaps not. But I would be very cautious about the value you are getting from an advisory service that places such a burden on you. If you had the abilities listed above, you wouldn't need the service in the first place

 

[momoneythansens]

Quote from jeffm:

But I would be very cautious about the value you are getting from an advisory service that places such a burden on you.

LOL, yes good point. I had assumed those skills listed by John were his summary of the requirements needed if one were to implement the strategy themselves i.e. DIY as opposed to having it auto-traded by the advisory.

If that is not the case then what additional services is one paying for in that advisory if all of the ingredients for the recipe have just been detailed?

Ho hum....it's time to start an advisory service to go along with my seminars (early bird seminar tickets going for only $3999 BTW...)

MoMoney.

 

[Cache Landing]

Shoot... who here doesn't possess those qualities?

1) Nose glued to the screen...? I do that pretty well, especially when I'm losing money quickly.

2) Predict direction...? No problem, today will be either up some or down some. Tomorrow. I don't think the underlying will budge an inch.

3) Good idea about continuations...? Also not a problem. The flat tomorrow will continue all the way through Sunday, after which the up and down will resume on Monday.

Quote from jeffm:

What really struck me about John's post was this, " requires that you have your nose in the screen, be able to predict the direction very well, have a pretty good idea as to whether the move in the underlying that is affecting your spread will continue in that direction"

I'm thinking, "well damn! If you have those kinds of skills, you can't help but make money". The problem is most traders don't have what the advisory service says they need. My advice would be stop trading until you settle on a strategy that better matches your time frame, predictive ability, account size, etc. Maybe FOTM credit spreads will turn out to be your bag. Perhaps not. But I would be very cautious about the value you are getting from an advisory service that places such a burden on you. If you had the abilities listed above, you wouldn't need the service in the first place

 

[trek8500xtr]

Fortunately, the advisory service autotrades, so I don't have to have the skills, I just have to be able to pay someone that does. I'm just trying to figure out if there is truly an effective way to hedge a FOTM vertical spread if the worst happens.

Thanks for the input.

 

[Cache Landing]

Quote from momoneythansens:

LOL, yes good point. I had assumed those skills listed by John were his summary of the requirements needed if one were to implement the strategy themselves i.e. DIY as opposed to having it auto-traded by the advisory.

If that is not the case then what additional services is one paying for in that advisory if all of the ingredients for the recipe have just been detailed?

Ho hum....it's time to start an advisory service to go along with my seminars (early bird seminar tickets going for only $3999 BTW...)

MoMoney.

Can I get a deal on your advisory? I'm tired of finding my own trades, and I'd be willing to pay to finally figure out what your overall strategy is. LOL

Of course, I guess I don't give that much detail on my strategy either.

 

[Cache Landing]

Quote from trek8500xtr:

I'm just trying to figure out if there is truly an effective way to hedge a FOTM vertical spread if the worst happens.

Seriously, the quick and painful answer is, "not really".

FOTM credit spreads depend on high probability. Diversification is really the only useful tool for hedging them.

 

[jeffm]

That's a whole different and nasty can of worms, isn't it

The big question here is do you trust this guy enough to trade your money? Do you trust yourself enough to spot a good trader from a bad trader from a dishonest trader? Particularly since they all try to dress themselves up as good traders

Fortunately, the advisory service autotrades, so I don't have to have the skills, I just have to be able to pay someone that does.

 

[rallymode]

cache,

good thing you went out to october with your puts. The last 7 days have been as dead as they come. Not a good deal for being long front month premium. On the other hand, those bear calls we put on earlier this month enjoyed some nice decay.

Now that we had this consolidation, we should see a nice move in either direction and hopefully a more lively market soon but given the coming holiday i wouldnt hold my breath. I have been pretty much sitting on my hands all week staring at a picture that reads "WINNERS: While most are dreaming of success, winners wake up and work hard to achieve it."

 

[Cache Landing]

Quote from rallymode:

cache,

good thing you went out to october with your puts. The last 7 days have been as dead as they come. Not a good deal for being long front month premium. On the other hand, those bear calls we put on earlier this month enjoyed some nice decay.

Now that we had this consolidation, we should see a nice move in either direction and hopefully a more lively market next week. I have been pretty much sitting on my hands all week staring at a picture that reads "WINNERS: While most are dreaming of success, winners wake up and work hard to achieve it."

Yeah, I generally have a really hard time convincing myself to buy front month premium. I agree that this market should perk up a bit next week, but the real moves are going to come around expiration friday (14th I think).

Had some friends over for dinner last night. For years they've suggested that they would like me to help them get into the markets, but they won't ever take the step. Last night we talked about what they would do if money wasn't an object. I was told that my goals were boring as they explained their visions of a hawaiian beach house.

Classic example of "dreaming of success". They make just under $100K/year which will allow them to be comfortable, but never fulfill their dreams. I make much more than that, but live as if I make less because I'm going on about five years now that I haven't withdrawn any money from my trading account. Every morning I wake up thinking about what moves to make that day. When sunday comes around I am excited for the market to open again. I will reach my goals one way or another. The nice thing is that I've realized how much good partners can help me in getting there faster. Sure does make life better.

 

[rallymode]

cache,

one of the stocks on my radar. Thought, i'd share with the group.

I am looking at the SEP 55/60 Bear Call Spread. Currently, its going for $4 credit. Slightly ITM but awesome risk/reward. Breakeven at the green line. Nicely overbought due to recent analyst comments but sector still in trouble. Vols, near the high end. I hope i am not missing any pending news. If the market heads south over the next 3 weeks this should be a nice winner, even without the markets help, it might still come out ahead. Anyway, havent pulled the trigger yet but will be watching it closely on Mon/Tue. Ideally, it will pull back up to the $62 line where i might grab the 60/65s but we shall see as the risk might be too high with that one.

Comments?