Looking at weeklys for short term directional trades..cheaper cost basis vs monthlyoptions, but wasn't sure if the returns were less, bid ask spread was wider, and the liquidity was an issue as compared to the monthly on the same strike..
Cost basis, pricing and returns are identical to the monthlies, given volatility, time to expiry etc... During normal market hours, spreads are comparable to monthlies but after hours can be a bit spotty. When we have normal markets, you can typically get filled overnight with an order that's fair value or a nickel/dime worse. Liquidity is not a potential issue unless you are pushing many hundreds of contracts.
Has anyone been selling bear call credit spreads on the SPX weeklys??. paper traded since dec, live since mid-jan and its going well. How your experience selling verticals on weekly?? Has anyone sold a weeklys against a leap?? I am watching FAS,, looks like a good candidate. Just curious how you guys are doing with selling credit spreads.?? thanks EF
<<< Just curious how you guys are doing with selling credit spreads.?? >>> I would imagine the credit spreaders are doing just fine in this market. It's those who are using "bilateral" limited border strategies, who are having a difficult time. Those potential double credits, via the subsequent "2 sided restrictions",... are turning into, double adjustments, double commissions, double stress, and double ways to lose. I'm sure the temptation is not to make the adjustment, thinking the market has to correct soon. But isn't that the same thought from last week, and the week before, and the week before....
"It's those who are using "bilateral" limited border strategies, who are having a difficult time." Are you talking about condors here?? I am a novice at best, not totally familiar with all the lingo yet. thanks Ef
There are a number of popular strategies that utilize bilateral border restrictions, and the "IC" is one of them. Those type strategies come with a number of benefits. Unfortunately, there are no free lunches with any strategy, as they all have potential downsides as well.