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-   -   OEX and SPX Weekly Options (http://www.elitetrader.com/vb/showthread.php?t=178726)

adam772 Oct 9th, 2009 11:48 AM

OEX and SPX Weekly Options
 
So I sold a credit spread on tuesday this week on OEX and SPX. THey expire today.

OEX: I sold the 500 call, bought the 505 call. RZBJT and RZBJA are the tickers.

SPX: I sold the 1075 and bought the 1100. tickers are JXBJW and JXBJB


QUESTION: In my ameritrade account, it shows that the OEX options are still trading , and therefore I can cover it If I wanted to.

But the SPX options for some reason do not come up. It just shows, for example, the 1075 call is " bid .45 , ask .45 ". I cant seem to be able to trade it, or get out of the position!

whats the deal???

adam772 Oct 9th, 2009 11:52 AM

do the SPX weekly options settle AM perhaps? I checked the CBOE website and it seems they settle PM...

arizonadreamer Oct 9th, 2009 12:08 PM

Quote:

Quote from adam772:

do the SPX weekly options settle AM perhaps? I checked the CBOE website and it seems they settle PM...
Those SPX weekly options are treated the same as the monthly ones. They settle on the AM price.

They are no longer trading today.

Check the SET - It is 1065.25.

Be very careful about letting your positions go into settlement.

AZD

adam772 Oct 9th, 2009 12:15 PM

thanks , I just went on the cboe site and saw they settle AM .

When would it make sense to take the position into settlement day (Friday) on these weeklys?? Is it worth it to even do so, or is it wiser to usually just cover them on thursday close to 4 PM??

arizonadreamer Oct 9th, 2009 12:28 PM

Quote:

Quote from adam772:

thanks , I just went on the cboe site and saw they settle AM .

When would it make sense to take the position into settlement day (Friday) on these weeklys?? Is it worth it to even do so, or is it wiser to usually just cover them on thursday close to 4 PM??

Good question.

First, you made out very well with your 1100/1075 call spread. Congrats.

However, because that spread is rather wide (25 points), for all intents and purposes, you were "uncovered" on those 1075 calls all the way up to the 1100 strike. So, if you did 10 contracts, a gap up to 1100+ (and believe me, it can happen!) would have cost you close to $25,000. And that amount could be much higher if you were uncovered.

To try to answer your question, unless your strikes are a lot closer together:

If you have met your profit goal, close it out!

If you have not met your profit goal, close it out!

If the index is close to the short strike, close it out!

If the index is far away from the short strike, close it out!

I guess you can see the theme here, LOL.

I usually don't feel comfortable letting it go into settlement unless the strike is at least 50 points out.

Even then, take a quick look at recent settlement history. Remember that 70+ gap UP into settlement?

AZD

adam772 Oct 9th, 2009 03:11 PM

i get the point :-) . dont be greedy and go into settlement day to get that last few dollars out of the credit spread.

by the way, do u write credit spreads on the weeklys?? how have u done and whats your strategy if i may ask? thanks!!


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