Vertical Spreads for Aggressive Growth

[ryank]

Quote from Cache Landing:

Just a peak into my head...

It is true that the SPX highs were around 1325, but I consider those to be somewhat unimportant. This is because that was merely a hopeless rally at the time, with a very quick correction. The real resistance is 1310. That is the point of focus for me.

I can see where you are coming from. We backed off the highs today. Lots of data this week, Tuesday through Friday morning. Volume has been low since last week, blamed on vacations, Labor Day, etc. We will see how it goes.

 

[ryank]

Quote from momoneythansens:

You mean wait and see? Don't panic? That's far too sensible. I hereby ban you from ET.

Sorry, panicing isn't really in my nature (I know, I'm considered a freak here on ET) .

 

[ryank]

Quote from rallymode:

It was probably towards the end of the cycle though and theta had worked its magic. You dont get to benefit from it with ATM. Not in a worthwhile way anyway as your short deltas will overwhelm any theta gains. That's the price you pay for reducing your risk. I personally dont like ATM/ITM spreads on low vol instruments but thats just me. The churn can really be a killer for those, especially during the summer doldrums. I am sure mo will disagree

You are dead on, it was near (1-2 weeks away) expiration, don't remember exactly when. I am doing this one to see how ATM works, so far not so good but it is an educational experiment.

 

[rallymode]

Quote from ryank:

You are dead on, it was near (1-2 weeks away) expiration, don't remember exactly when. I am doing this one to see how ATM works, so far not so good but it is an educational experiment.

Well, i hope you dont turn away from ATMs after 1 or 2 bad experiences. Given the 50/50 odds you can get quite a few of those in a row. It all depends on what you are playing for and how strong your directional forecast is.

 

[ryank]

Quote from rallymode:

Well, i hope you dont turn away from ATMs after 1 or 2 bad experiences. Given the 50/50 odds you can get quite a few of those in a row. It all depends on what you are playing for and how strong your directional forecast is.

Oh I'm not turning away from ATM. I'm just poking fun at my first trade gone bad (for the moment anyway). The trade hasn't gotten away from me yet so damage is minimal. A pullback over the next few days would be nice, then I can see how an ATM spread reacts when it goes in my favor .

 

[rallymode]

cache,

remember the long cals and diags we discussed before? Now that the VIX has collapsed and implieds went through the roof, perhaps i could interest you in a conservative way to play any market downside over the next month or so. VIX short calendars.

- Nov 12.5 Calls at $3.5 vols at 160
+Sep 12.5 Calls at $1.25 vols at 115

 

[Cache Landing]

Quote from rallymode:

cache,

remember the long cals and diags we discussed before? Now that the VIX has collapsed and implieds went through the roof, perhaps i could interest you in a conservative way to play any market downside over the next month or so. VIX short calendars.

- Nov 12.5 Calls at $3.5 vols at 160
+Sep 12.5 Calls at $1.25 vols at 115

Haha, I'd already been looking at that. You got me looking into VIX possibilities, and I've been checking them out from every different angle ever since.

 

[rallymode]

Quote from Cache Landing:

Haha, I'd already been looking at that. You got me looking into VIX possibilities, and I've been checking them out from every different angle ever since.

if you see something interesting, dont forget my PM box

 

[Cache Landing]

Quote from rallymode:

if you see something interesting, dont forget my PM box

Sure, but it is a game of catch-up for me now. You already got a head start.

 

[ryank]

Today's job numbers sure didn't help my XEO spread, I'm taking it in the shorts now. Could get out now and move on but I will probably hold on until at least Tuesday, see what happens when the big boys get back in town. Could extend my loss but I'm willing to wait.