The only thing that concerns me at this point on the SPX run down ( as of now down to about 1381) is that it just did penetrate below its 20 day moving average. This is the first significant penetration through this trend in about 4 months. I am still thinking this is an aberration or foreign money artifact. I will get more concerned if this penetrations holds for more than a day or two. TS
It appears from what I've seen is that a lot of institutional money is selling off. I can't tell if it's foreign money or not. Cru
I haven't traded NDX for a while. I did get burned in it twice and since have stopped. I have been doing mostly RUT. For the last three months the market hasn't been too good to Credit sellers so I took some small and some big losses but managed to stay in the game. Since last month I change my startegy and so far it's working well with RUT; Not SPX RUT is more volatile and easier to get filled than SPX. I go ATM or CTM based on technical analysis. Last month I sold 25 790/800 @ @2.70 and bought it back at 0.15 This month I wanted to duplicate the strategy and did as follow: 15 RUT 790/800 @5.50 15 RUT 810/820 @3.00 15 RUT 790/800@5.40 15 RUT 770/760@1.50 because I had the possibility of loosing 2.90 in the790/800/770/760 Condor I decided to do the folowing debit spreads: 40 IWM 77/75@0.40 debit 40 IWM 76/75@0.20 debit. Now I am very profitable for the month I have better control over ATM and CTM credit spreads because I can establish 2:1, 3:1 Risk/Reward. To follow this strategy, one needs balls and needs to understand RUT. I would never do it with SPX; I tried it with SPX and lost money. My account is up substantially this month because I was willing to take the risk of loosing 4.50 for the ATM Spread and 7.00 for the 20 point away spreads but I also did it because I have been following RUT patterns for so long and know when it's ready to roll down. The same philosophy can be followed for PUT side. August /Sept have been pretty hard for me. I was expecting drop in the market; instead I get killed in FOTM I tried FOTM and make some small wins and some big losses; FOTM is not worth the risk as far as I am concerned. Happy Holidays
sharing.... monday opened the following... sold DEC RUT 730/720 puts 0.55 cr bott DEC RUT 760/750 puts 2.30 db (hedge/play) 8 sold for every 1 bought. hoping to close the debit spread for gain on further drop....doubt it will be needed as a hedge. ... in case things get more negative trendwise... i will have it for a hedge. ---------------- ...want to buy some put diagonals .... but i think it will be a while before the opportunity comes again.
I agree with that. But, I also won't let greed control me nor an uncontrollable urge to trade when it's not right for me. Cru
When there is profit, you have to take it. Today I close one of my RUT I opened 15 RUT 790/800@5.50. I closed this morning @ 3.00. Make 2.50. I don't want to regret it I could make 8K but I can live with 3.5K. I also opened 25 RUT 730/720 @ 0.90 Actually I own: 15 RUT 790/800CALL @5.40 15 RUT 770/760 PUT @1.50 15 RUT 810/820 CALL @ 3.00 25 RUT 730/720 PUT @ 0.90 40 IWM 77/75 PUT@ 0.40 debit 40 IWM 76/75 PUT@0.20 debit As I get more profit, I will take them.
It was interesting to watch back month prices increase while front months (VIX) went to new lows. These prices you pointed out show an excellent example why following monthly skews, (front month/back month), is important.... especially in Diagonals. There were some nice profits to be taken even prior to Monday's down move.... and those were very low-risk positions. M~
Ryan, Have you or did you consider locking in the Put Side profit using a butterfly? The suggestion here allows you to lock in a profit... on the Volatility spike from Monday.... and then either hold for a chance at a huge return (price settling within your fly) or adjust back into a diagonal when volatility settles down again. This would be VEGA play on the spike from Monday..... Just a thought. One of our trader's last month locked an Iron Condor into two (both call and put) butterflies for a 8% profit.... and then as the market moved up.... the next two weeks... into expiration... felt no pain, and in fact, was cheering the market to move up just 10 more points for a huge return. It was very interesting to see his 'trading style' change knowing his profit was locked... Murray