SPX Credit Spread Trader

Discussion in 'Journals' started by El OchoCinco, May 17, 2005.

  1. Crucis

    Crucis

    InvesTools has had a long time relationship with OptionsXpress. THey also used the OX Virtual Trading system as well. I'd heard that InvesTools were trying for a better business agreement with OX. I guess that's now dead.

    You could prep a trade in InvesTools and pass it to OX. I saw today that has now switched to ToS. ToS has really lacked research tools, IMO.

    I'm done.

    Cru
     
    #10261     Sep 20, 2006
  2. tplast

    tplast

    Coach, are you planning any adjustments to your call diagonal? I'll wait until the FOMC meeting, but will probably take my medicine on the 1/3 of call credit spreads that I unhedged yesterday .:mad:
     
    #10262     Sep 20, 2006
  3. ryank

    ryank

    I haven't totally figured out why SPX is at multi year highs. The Fed has stopped raising rates which is good but lots of companys are slowing and lowering their earnings outlook but the market keeps trending higher. Oil coming down is a big help though so maybe that cancels out the slow down. I don't know, I don't try to predict market direction, I'm just looking at what is going on and trying to make some sense of it.
     
    #10263     Sep 20, 2006
  4. Not yet. With the diagonal, the market hitting the short strike is not automatically a losing situation. The SPX is at long-teim highs and I think a lot of what is expected this afternoon is alreayd priced in with the nice run up the last week or so. I do not think the Fed is gonna say anything new and the market might just sell off unless a surprise statements sends us higher.

    I have some adjustment options waiting but not ready to do it yet until I see we really will stay above 1340 in the ES and 1327 in the SPX.

    If you have a credit spread though the position is not as forgiving as a diagonal so be more vigilant in your decisions to cut losses if you need to.

    So I see a potential sell-off going into the close. But I could be wrong and if I am I can adjust but will wait until some theta gets sucked out of the short SEP EW options..

     
    #10264     Sep 20, 2006
  5. Some comments were that with oil and gas prices dropping the consumer is less cash strapped and is back to spending (rise in retail sales) and giving fuel the rally. Also oil dropping eases some inflationary fears. Moreover, if we are gonna have a soft landing the market takes that as a positive.

    These are reasons I have heard, not my opinions. I think the market has to bounce soon because we are not in an environment yet to break out to new highs. That will happen with the Thanksgiving rally in my opinion but not yet. Buyers have come in too soon in my opinion.

     
    #10265     Sep 20, 2006
  6. mantenar

    mantenar

    Sailing,

    The volatile seems to be at the low end. Do you mind sharing your Diagonal SPX spread for Oct/Nov.
     
    #10266     Sep 20, 2006
  7. Sailing

    Sailing

    Current Oct/Nov SPX Double Diagonal

    BTO Nov SPX 1250p
    STO Oct SPX 1275p

    BTO Nov SPX 1375c
    STO Oct SPX 1350c

    If the market stays stagnant.... a small 2-3% profit is expected. Really playing the position to the downside as a VEGA increase could spark returns as great as 25%

    We also have a complicated RUT Double Diagonal, with two 'TENT' poles created inbetween with half position put calendars. It's potential return is almost 2 times the SPX Double Diagonal with as much % movement. NOTE though that the RUT is much more volatile than the SPX in general.

    M~


     
    #10267     Sep 20, 2006
  8. Sailing

    Sailing

    Why RUT instead of SPX

    There appears to be more premium in the RUT along with the fact that the talking heads keep hinting toward a sector rotation out of small caps and into large caps. This would put pressure on the RUT and increase it's implied volatility as well.

    Just trying to play the best cards being dealt this month.

    M~
     
    #10268     Sep 20, 2006
  9. Sailing

    Sailing

    E.T. Prop Firm

    Like we discussed a few weeks back... and with the ToS/Investools merger.... It may be time for Maverick to make us an offer we can't refuse.

    Our very own ET Prop Account, underwritten by Coach Phil!!!!

    Mav, timing is everything

    M~
     
    #10269     Sep 20, 2006
  10. New Coach Phil Put Calendar Spread

    I still have my OCT EW/SEP EW 1290 Put Calendar running and decided to add another at some higher strikes to play a pullback:

    Bought 1 OCT EW 1310 Put @ 9.75 ($487.50)

    Sold 1 SEP EW 1310 Put @ 1.70 ($85.00)

    Net Debit = $402.50

    Profit Objectives:

    1. If market pulls back, Put Spread will increase in value, as well as help from increasing IV.

    2. If market moves below strike, I can roll the short SEP EW to OCT ES or OCT EW into a bear put spread or other postions looking for a net credit and potential for more profit.

    3. If market moves higher, I try and keep selling the 1310 Put if I can to bring down the net debit and risk.
     
    #10270     Sep 20, 2006