Credit Spread Question

Discussion in 'Options' started by torontoman, Mar 20, 2007.

  1. At the time, I was doing primarily strangles, rather than verticals. I got reasonably good fills on ES, but horrible ones on ER (if you didn't hit the bid or take the ask, you were just plain out of luck).

    I would then make adjustments to my strangles with verticals and got pretty good fills there.

    Generally 1 tick "worse" than midpoint would get me an instant fill, midpoint would take a minute or two.

    But, that was last October, but I'd be surprised if it's gotten less liquid since then? What percent between bid/ask are you getting fills?
     
    #21     Mar 22, 2007
  2. Last year, I was able to get filled at around mid, but recently it is getting harder and harder.
     
    #22     Mar 22, 2007
  3. jj90

    jj90

    Can't comment on ES much since I haven't traded them since last fall, but I had about same experience with you. A lot better than ER, I often took bout' 30-40% of the spread. As far as ER goes, I've noticed some liquidity drying up since earlier in the year. I often also don't get more than 1/3 of the spread, usually 20-25%.
     
    #23     Mar 24, 2007
  4. tyrant

    tyrant

    Fullyarticulate,

    Back to OP question,

    "Is it better to leg into a credit spread OR enter the order as a credit spread if the comission is the same?"
     
    #24     Mar 24, 2007
  5. atozcom

    atozcom

    It is better to enter the order of the entire spread. Less work.

    If you are going to leg into a spread, buy the long leg first and then sell the short leg. Otherwise you may get caught in a spread with a naked leg.
     
    #25     Mar 24, 2007