Guys, give Heather a break. This isn't exactly the Paul Wilmott forum. You guys are selling freaking 5 delta verticals for christ sake. Not exactly a quant thread. You are at the bottom of the food chain. Lighten up on the elitist attitude. Coach, keep your minions in line. They are acting up a little.
Hey Rallymode.... I'm still puttng on OTM spreads but am also looking at better R/R CTM spreads. If we break SPX 1362 I'll put on a CTM call spread.
I am not sure this is a good place to be putting on any bear call spreads but good for you. You will eventually realize that selling cheap gamma leads to only one place and it isn't riches.
Maybe look at it the other way, we are approaching the bottom of a 3 month channel, why not put on a CTM put spread?
I'm even newer than Murray to the diagonal game - currently in my 5th month. But I've learned a great deal during that time. I also know there are plently of reasonable adaptations to this methodology. Yes, I prefer the diagonal to the credit spread with extra wing (I call that strategy selling a Christmas tree). Extra wing provides ultimate protection, but it's FOTM and only very seldom helpful. The long leg of the diagonal is a wonderful protective (and profit producing) option to own. And it becomes even better as time passes. Yes, it's more gamma neutral that the straight credit spread - and that's one good reason for the diagonal. But for me, owning that next-month option (instead of the near-term option) allows me to hold the spread longer. That gives me the opportunity for larger profits and allows me to hold onto a spread longer when the short strike beomes threatened (something that made me VERY uncomfortable when selling credit spreads). I'm comfortable holding until the strike is breached - and even longer when there is just a day or two before expiration. Mark
Coach, anyone using this relief downturn to sell Dec puts? Or waiting for more downside? What I've done for dec is sold(actually long) a +2-/5/+3 unbalanced fly (put dec)at 1335/1225/1305 (for sm credit) and plan to sell some credit spreads below the 1305 or perhaps within the 1225/1305 range.
FWIW, Andy has been at this for years judging by his Internet trail LOL. So, he is not a newbie. I'm not in total disagreement with the sentiments expressed. Delayed quotes here amongst others: http://www.futuresource.com/quotes/options.jsp?s=ESZ06&r=ES Good luck. MoMoney.