Sell NYX put credit spread?

Discussion in 'Options' started by xyannix, Nov 29, 2006.

  1. xyannix


    Hi guys,

    What are your thoughts on this trade?

    NYSE - Ticker (NYX)

    Sell a Mar 80 Put for 6.45 (delta 24)

    Buy the Mar 75 put for 4.70 (delta 19)

    Total credit of $1.75

    Stock is currently at $96.00

    Implied Volatility is much higher than normal at 60%. The volatility on these options is at 72%

    Risk $3.25, Reward $1.75

    Thank you!
  2. 4 months is a long time. Go for December or January.
  3. NYX closed 10/2/06 at 73.86. Less than 2 months later it's now at 96. Your considering March 07s, 3+ months out. It's too close for comfort for me. When you go up fast, you can come down just as fast. But, if the stock stays bullish, like the exchanges have, you can say it was a smart trade.
  4. xyannix


    Thank you guys for your insight, It is really appreciated.

    I was wonder do you have a normal target credit % you go for?

    Like in this trade, the premium was 35% of the risk.

    Had I gone for a Dec or Jan It would have only given me $0.20 or $1.10. Jan I would think is still ok because its 22% but less than 20% on a credit spread is not worth it, or is it?

  5. xyannix


    Just noticed that someone sold a 2500 contract March 70 / 60 Put Credit spread for a credit of $1.45!!
  6. I would consider the December 90/95 Put Credit Spread for a credit of $1.60

    Time decay is fastest during the last month.
  7. Prevail

    Prevail Guest

    what is the credit for a one month trade? if both are binomial and comperable, take the one month. theta is minimal in verticals.