And to you, too, Coach. Wish you all and the new little one has a fine first Christmas and New Years. Cru
Sorry to quote myself. The silence was deafening. In fact, the silence was inspiring! I've done the research and have found the clues I needed. The Greeks... the lingo... the R/R's... and the techniques are coming together. All I needed was the inspiration. Later. D
Coach Is it true that you are leaning towards other strategies like DDs and calenders?. If so(even a little bit), can you please tell us how you are allocating your funds to different strategies?.
I have done some ratio diagonal spreads for volatility and directional plays in my prop account which I will wean down a bit. But in the retail account it is still mainly SPX spreads with respect to options. I still not a personal fan of the diagonal SPX spreads but I have not dabbled in them too much so I might do more in 2007 and incorporate them here, especially with vols so low.
i was pricing butterfly call spread on the SPX this morning and I saw the following : Jan 1395 1415 1435 butterfly call spread with a bid of .80 and the ask of 7.10 My question for those who trade butterflies how do you negotiate this spread? do you go for the mid point ? or do you start low and work your way up? Thank you Labib Imtanes
Labib, I think it would be pretty easy to get lost in that spread without a theoretical model to help you limit your bid. Was that the bid/ask for the butterfly, or for combining it's individual legs - brokerages like TOS will often give you an okay spread on a "complex" position like a butterfly if it is entered as a butterfly rather than individual legs. Currently I am using IB, and I find legging into spreads with them to be a huge pain in the a$$. This am I legged into a 1455/1475/1485 Call BWB at a reasonable credit, but that was as much luck as anything. I would have preferred to enter it as a single spread order a la ToS... For the diehard SPX Credit Spreaders, I wonder if anyone else is doing BWBs as an alternative to selling call verticals? A possible upside is that they might benefit from declining volty as the market climbs. Like diagonals, watching the market move toward your short strike isn't as painful as with a vertical. Happy Holidays, Ugly
Hey Ugly, HH to you too. I'm doing something like that...either unbalanced or BWB flys as a "hedge" to FOTM credit spreads. As you say, its a bit more comfortable. However is yours the +1455 - 1475 + 1485 ? so your debit spread is 2X the credit spread? I do the opposite where I carry some risk by having either a wider credit spread or more contracts (in the credit spread) then adjust as the market allows. How did you get a credit with a 20 pt wide debit spread and a 10 pt wide farther otm credit spread? as one order to "buy" the BWB +1 1455 -2 1475 +1 1485 is $1.5 (mid at close) so you must have sold the fly? Its a real quandry whether to buy the complete order or leg...I've done both with mixed success and its very difficult to know after the fact if indeed you did good.