Vertical Spreads for Aggressive Growth

Quote from jychiu:

Cache,
I learn so much with your good description, your coverage is wide that it addresses various angles.

You have mentioned that need not be afraid with the short going ITM, could you share your adjustment strategy ? Or you simply use the probability of chance to see how it settles since the risk vs reward ratio is 2:1 (just another 2 more months to make it back).

Saw your chart having the RSI and Stochastic, could you share your entry criteria (unless it is a trade secret) ?

Thanks is in advance for the chance to learn.
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I adjust in a more artistic manner. I don't want to sound like a broken record, but it all comes down to thinking "at the margin". I believe that aperson can be good at reading the market. I will adjust according to my personal forecasts. Thinking at the margin has to do with evaluating an exit/adjustment as if the original position is not there. If I would consider opening a new position, then holding the original isn't that bad. If I wouldn't open a new position, then I will close/adjust the original position.

As far as my entry criteria goes. I use basic s/r, stcohastics, and FA to time my entries. A while back I gave a bit more insight regarding that topic. If you read through the last month or so, I think you would find it.
 
Today's Action

STO 6 OCT BRCM 30/32.5 c @ 0.80
BTO 3 NOV BAC 42.5 p @ 1.45
STO 6 OCT NEM 42.5/45 p @ 1.10
STO 3 OCT KBH 45/50 c @ 2.50

Year to Date P/L

Account Value: $15,675.00

YTD Gross P/L: 6,395.00

YTD Commiss: 720.00

YTD Net P/L: 5,675.00

YTD % P/L: 56.8%



Pretty active morning. I would like to find a couple more bullish positions, but it is slim pickings after the recent rally. Everything looks more likely to flatten out or drop.
 
Quote from Cache Landing:
Pretty active morning. I would like to find a couple more bullish positions, but it is slim pickings after the recent rally. Everything looks more likely to flatten out or drop. [/B]
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Lots of things look overbought right now. Might join you in a SPX trade but won't be able to get as much premium as you did so I've got to weigh that out. Might try a small RUT CTM trade, have watched it some but never actually put money on the line. Not quite sure what to make of OIH, looks good for a CTM put spread but lots of instability in that industry right now.
 
Quote from ryank:

Lots of things look overbought right now. Might join you in a SPX trade but won't be able to get as much premium as you did so I've got to weigh that out. Might try a small RUT CTM trade, have watched it some but never actually put money on the line. Not quite sure what to make of OIH, looks good for a CTM put spread but lots of instability in that industry right now.
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SPY was pretty good yesterday, picked up a Oct06 133/136C for $1.07. 134/136 was available for $.80 for awhile. Haven't done too much with SPY but this seems reasonably good for Oct. I expect S&P to be heading down at any time to somewhere around 1290. If the FOMC makes a hike, perhaps even further.
 
Quote from Crucis:

SPY was pretty good yesterday, picked up a Oct06 133/136C for $1.07. 134/136 was available for $.80 for awhile. Haven't done too much with SPY but this seems reasonably good for Oct. I expect S&P to be heading down at any time to somewhere around 1290. If the FOMC makes a hike, perhaps even further.
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I don't think there is any way the FOMC will hike tomorrow. Futures are pricing in something like a 90% chance of no rate hike. When it comes down to it though, it shouldn't really matter. A non-hike has already been priced in, and no matter what they do it will be bad. If they raise rates it means inflation is still not under control. If they leave rates it means the economy is slowing. If they lower rates it means they went too far in tightening.

Combine that with the fact that we are heading into the bearish season and it looks like the market is up for some hard times.
 
Quote from Cache Landing:

I don't think there is any way the FOMC will hike tomorrow. Futures are pricing in something like a 90% chance of no rate hike. When it comes down to it though, it shouldn't really matter. A non-hike has already been priced in, and no matter what they do it will be bad. If they raise rates it means inflation is still not under control. If they leave rates it means the economy is slowing. If they lower rates it means they went too far in tightening.

Combine that with the fact that we are heading into the bearish season and it looks like the market is up for some hard times.
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Everything I've read agrees with that. All-in-all, I don't mind a Bear turn. I do better in a bear market than in a Bull market.
 
Quote from Crucis:

SPY was pretty good yesterday, picked up a Oct06 133/136C for $1.07. 134/136 was available for $.80 for awhile. Haven't done too much with SPY but this seems reasonably good for Oct. I expect S&P to be heading down at any time to somewhere around 1290. If the FOMC makes a hike, perhaps even further.
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I would have like to put on some positions yesterday but wasn't in front of computer until well after close. Here is what I am looking at putting on (if I can get the credit but now the market has gone down so we will see):

OIH Oct 120/125 put spread for $1.40
RUT Oct 760/770 call spread for $2.75
SPX Oct 1345/1350 call spread for $1.65
or
SPX Oct 1350/1355 call spread for $1.50
 
Quote from jllm03:

Have you thought of using the WEEKLY SPX Options?
Any input?
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I haven't looked at them for a long time but when I did I found way to much risk for me. I'm not sure I know anybody that trades those, I'm sure there is somebody out there messing with them.
 
Quote from ryank:

I haven't looked at them for a long time but when I did I found way to much risk for me. I'm not sure I know anybody that trades those, I'm sure there is somebody out there messing with them.
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It looked like maybe a scalp play for a credit spread, if there was a big spike in the SPX the first part of the week.
But yeah, it does have a whole lot of more risk, but also reward if the market pulls back away from your strike...
Was just curious to see if anyone might have scapled this for a spread.
 
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