Vertical Spreads for Aggressive Growth

ryank · Sep 6, 2006

Quote from Cache Landing:

I'm not going to comment on your trade, because it is up to your personal style and risk tollerance.

That's my problem, I don't have a style for ATM credit spreads yet

. I greatly appreciate the comments you, Rallymode and Mo have had. Tons of great information on this board. I'm tempted to offer to buy you guys drinks but last time I offered that to somebody the market instantly went against me

. If you guys are ever in my neck of the woods and need a drink or race tickets (I'm a big race fan) I'd be glad to help! Meanwhile I'll keep trading and posting and learning.

Cache Landing · Sep 6, 2006

Today's Action

STC 2 SPX OCT 1260 p @ 9.30
STC 2 SPX OCT 1240 p @ 7.00

Year to Date P/L

Account Value: $15,179.50

YTD Gross P/L: 5,820.00

YTD Commiss: 640.50

YTD Net P/L: 5,179.50

YTD % P/L: 51.8%

I ended up taking the loss on the 1240 puts but more than made it up on the 1260 puts.

I decided to close these out as they are starting to pose too much risk while getting closer to expiry. I've still got the SEP bear call that will profit from any additional downward movement.

rallymode · Sep 7, 2006

Quote from rallymode:

VIX short calendars.

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

Cache,

did you ever trade these? Up .75 last two days and the spread never lost a dime due to the skew. Vols getting flatter now.

Cache Landing · Sep 7, 2006

Quote from rallymode:

Cache,

did you ever trade these? Up .75 last two days and the spread never lost a dime due to the skew. Vols getting flatter now.

Yeah but I kept the position small. I still have my reservations about VIX because of the really strange movement of the back month options.

rallymode · Sep 7, 2006

Quote from Cache Landing:

Yeah but I kept the position small. I still have my reservations about VIX because of the really strange movement of the back month options.

thats why we are short the back months this time

Cache Landing · Sep 7, 2006

Quote from rallymode:

thats why we are short the back months this time

I'll come around. I'm still getting used to them. Been trading options for the better part of a decade and I've never seen anything move the way these do.

momoneythansens · Sep 8, 2006

Quote from ryank:

I'm tempted to offer to buy you guys drinks...

Thanks Ryan. Don't forget RR

Instead of buying drinks just let us know next time you plan on making an adjustment so we can take the other side of the closing trade and buy our own drinks with the winnings

Just teasing. Bad luck on the timing....though there is still next week. With respect to not wanting to lose 2 in a row on XEO, I can sympathize, especially if you're used to winning 100% of your trades with FOTM credit spreads. That's what keeps FOTM credit spread junkeees hooked. Fighting addiction is hard....I can sense you are perhaps thinking about going back on the juice for "just one more hit" LOL.

Good luck!

MoMoney

ryank · Sep 8, 2006

Quote from momoneythansens:

Thanks Ryan. Don't forget RR

Instead of buying drinks just let us know next time you plan on making an adjustment so we can take the other side of the closing trade and buy our own drinks with the winnings

Just teasing. Bad luck on the timing....though there is still next week. With respect to not wanting to lose 2 in a row on XEO, I can sympathize, especially if you're used to winning 100% of your trades with FOTM credit spreads. That's what keeps FOTM credit spread junkeees hooked. Fighting addiction is hard....I can sense you are perhaps thinking about going back on the juice for "just one more hit" LOL.

Good luck!

MoMoney

How could I have forgotten RR! Shame on me

.

I'm backing off the FOTM juice for now, looking more at double/triple diagonals so I can have more choices when, not if, things don't go my way. I LOVE the CTM spreads and am making them a bigger part of my overall strategy. Will add more ATM as I learn more and get more of a comfort level with them.

I'm nursing a decent gain in my triple diagonal, too many damn choices getting close to expiration. Do I close and move on to Oct, do I go for an Oct Iron Condor, do I lock in some gain by creating a Sept spread by buying something,

making myself dizzy thinking about it. Almost time for a margarita to clear my head

. Drinks might be poured early this Friday

.

rallymode · Sep 8, 2006

Quote from ryank:

I'm backing off the FOTM juice for now, looking more at double/triple diagonals so I can have more choices when, not if, things don't go my way. I LOVE the CTM spreads and am making them a bigger part of my overall strategy. Will add more ATM as I learn more and get more of a comfort level with them.

Not sure why having more choices is necessarily a plus. Its like moving from meth to crack. you can now snort it, smoke it, hell even chew it. Doesnt mean you are better off.

Don't know why you guys are so in love with these wide verticals.

ryank · Sep 10, 2006

Quote from rallymode:

Not sure why having more choices is necessarily a plus. Its like moving from meth to crack. you can now snort it, smoke it, hell even chew it. Doesnt mean you are better off.

Don't know why you guys are so in love with these wide verticals.

I find the choice of adjustments for diagonals more palatable than the adjustments for straight FOTM spreads, just a personal comfort level for me.

Why do I like the wide verticals? It does give me a nice crack-like fix while I'm waiting for a CTM position to come into play

.