SPX Credit Spread Trader

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

  1. The rally monkey is out...
     
    #1331     Oct 19, 2005
  2. Doh! Beat me to it. Words from my mouth lol.

    Must have missed when you rolled down your XEO bear call spread to 555. Thought you were brave rolling down to 560 last week in the first place! Lets hope there is no super rally - I'm sure you're aware that unlike the SPX and SET monthly fiasco, XEO is PM settlement so still two full trading days to go...

    "If it can happen it will happen...usually the day before expiration."

    Momoney.
     
    #1332     Oct 19, 2005
  3. rdemyan

    rdemyan

    Andy,

    The last one I did was on July 15th for the OEX. I closed it out from the airport by calling in the order to buy back the Jul 585 Call for $0.05. Don't know what the OEX price was at the time, but I believe it was 5 to 10 points away from my short strike. You can probably look this up.

    I've done this before and I remember one time with the SPX I had to wait until the last hour on Thursday to get down to $0.05.

    As a general rule I only do this if the short strike is 10 points or less to the SPX price; but I don't always close it out.

    HTH

     
    #1333     Oct 19, 2005
  4. I think a lot of traders are going to go short in the 1195 to 1200 area...
     
    #1334     Oct 19, 2005
  5. This ramp has been great for a trade. I'm gonna lighten up into 1200 too.


     
    #1335     Oct 19, 2005
  6. I did the roll earlier today so I have not had time to update. I am gonna close out it tomorrow to avoid any settlement issues because of the longer time to SET. I was looking to grab more premium in the last day or so. Will depend on tomorrow naturally lol. Just trying to squeeze what I can since my short strikes appear to be safe for now. I do not recommend others follow suit so I am not posting those. I also closed the SPX calls and looking to roll down to 1205.

    Phil

     
    #1336     Oct 19, 2005
  7. Almost a 20 point swing in one day... impressive!
     
    #1337     Oct 19, 2005
  8. Not as impressive as if I were trading the E-mini today... picked a bad day to pass on futures trading...lol
     
    #1338     Oct 19, 2005
  9. Fair enough, squeeze away.

    I do not trade the SPX since she and I are not on good terms lol but I've always suspected that SET risk is a contributing factor to the slightly larger premiums on SPX options i.e. options have slightly higher chance of being ITM at expiration than one might initially suppose so the bigger premiums are slightly deceptive. Of course there are other contributing factors. My point is....I don't know what my point is :eek: Just lost the will to live. Oh well.

    Momoney.
     
    #1339     Oct 19, 2005
  10. My advice to those regarding SET risk is that if you are at least 15 points OTM on the close, SET should be no problem. 10-points OTM, not a problem except potentially on witching expiration days. 5-points, stay in at your own risk, better to close.

    Of course there are always exceptions. But the old addage of closing out on Thursday and remove all risk is certainly the best advice ;)

    Phil

     
    #1340     Oct 19, 2005