Yeah I know that. I'm trying to do deep OTM credit spreads and at the same time try to buy MNX hedges. Can't find any good ones though. I'm trying to go above 1630 on call sides and below 1475 on put side. If I get decent premiums on those, I'm thinking of buying appropriate $MNX hedges. Not finding much luck.
I wouldn't touch 1630 now even if it would make triple top. The minimum I would go for a spread is 1650. That's probably why I prefer dealing with SPX. NDX can go 20-25 points any day. I find it very dangerous. I am looking at getting some OEX and SPX before Monday.
Why market makers are playing games in quoting bid/ask prices. e.g bis ask was 2/4. I put limit order at 2.5 Immediately bid/ask was changed to 2/3. Why do we have to haggle and bargain at bid/ask prices. Why cant they give prices which are firm for that moment? This looks like bargaining in some countries and you might get the item even at half price. I think fixed prices would help very much.
I believe the market maker is adjusting the b/a spread to your limit order to try and get it filled. By lowering the ask, they are looking for someone to take the ask so they can fill your order and make the $0.50 spread. if yours is the only order placed, then it is not uncommon for the b/a spread to change in response to your order. Many times it helps you get a better fill since it narrows the spread and may bring in other participants which will help you get filled. Phi
Grabbed another put position on the spike lower: Sold 110 SPX NOV 1100/1115 Put Spreads @ $0.50 Credit = $5,500 Risk = $165,000 Return = 3.33% (3 weeks). I also have: -90 SPX NOV 1150/1160 Put Spreads @ $0.65 No calls as the premiums do not look good to me at the strikes I would like. 1200 resistance held twice so I will hold off on calls unless we break through 1200 next week on some strength. DEC expiration will be in my radar by the end of next week. If we break 1180 I will be looking at partial hedges. I will be more than happy to sacrifice the entire premium of the 1150/1160 spread in hedges to protect that spread and keep the premium from the 1100/1115 which is 70 points OTM. Phil
Placed my first OTM credit spread on ToS today. Had the same order in as Coach. Nov SPX 1100/1115 at $0.50 credit Didn't get filled for about 20 minutes. So I called the trading desk like others have suggested. They said that they would call down to the pit to see what was happening. Got filled in less than one minute. So far my experience with ToS has been great and the platform provides a large amount of information and tools (but it's gonna take a while to digest it all). Also, the ThinkSpreads feature is really cool. You get to see all of the other credit spreads that have been placed within ToS (verticals, double diagonals, butterflies, ICs, etc). It's really interesting to see what trades other people have placed.
Just a quick question, since I don't have time to look up the info. I'm also looking at the OEX put spreads...so what is the corralation between a 70pt OTM on the SPX to the OEX? It's just not as simple as 35pts right? For example the 510/495 is .05x.75 now. I'm trying for .50 on the SPX 1095/1110 .05x.95. Sorry I don't have the bandwidth to figure this out right now. sd
Coach: I mentioned the ThinkSpreads feature on ToS. For learning purposes, here is an interesting IC trade: 1185/1190 Nov bull put 1195/1200 Nov bear call Trade is placed as an IC for a credit of $5.00. Current 'mark' (TOS speak for midpoint) is $4.65. Looks like the trader is betting that the SPX will finish between 1185 and 1200 if the filled trade is held to expiration. If this trade were to be filled, then wouldn't this be a risk-free trade (except for commissions)? So how is this trade ever going to get filled?
Could be a closing order for a long IC opened earlier to sell at maximum profit which is $5.00. Remember if it is a bull put then the profit zone is above 1190 and if it is a bear call the profit zone is below 1195- so profit zone is between 1190/1195. If this was original entered into as a debit trade then the profit zone is anywhere outside 1190/1195. Therefore the maximum profit is $5.00 since what might have originally been bought is 1190/1185 BEAR PUT SPREAD and 1195/1200 BULL CALL SPREAD. Have to remember that sometimes trades placed are to CLOSE a position, not just to open. This appears to be an order to close the spreads for the maximum $5.00 value and let it ride to see if it gets filled. Phil