good going coach..I'm amazed you got filled on so many contracts ...stupid open interest...whats up with the 1150,1175,1200,1225 they all have 20thou plus while in between strikes have a paltry #
Added small partial hedge just in case this trend fades on us lol. I figured it was not too expensive and if the market starts falling I can sell lower strike puts for a cost-free hedge and keep laddering on the way if I need to. If not, the after-hedge return is still nice for 37 days. Adjusted position: BTO 10 XSP FEB 125 Puts $ 0.55 or $550 Sold 125 SPX FEB 1190/1205 Put Spreads @ $0.45 (.05/1.05 B/A) Margin = $187,500 Credit = $5,625 - $550 (hedge) = 5075 Real Risk = Margin - Credit = 181,875 Return on Risk = Credit/RR = 2.79% This return can go higher if hte market dips since I can sell 124 or 123 Puts to reduce the cost and increase the net credit. Why am I adding a partial hedge before one is really needed. More in line with my conservative approach to the first quarter. 37 days out is still a nice chunk of time so let me add it now and if the market stays up I still make 2.79% for the month. If market dips lower, I roll the hedge into a bear put spread and get it for free. If market really dips, the hedge finances any potential adjustment. Nice and easy with a squeegie Wheezie.
See Coach.... As soon as you added the partial hedge... (puts), the market goes up! Would you atleast give us a 10 minute warning next time! Murray
I posted the partial hedge trade at 12:23 PM when the S&P was around 1286. The market did not top out at near 1290 until an hour later. Plenty of time to fade my position LOL.
I tried several times throughout the day to get filled on the 1180/1190 Feb put spread for .45 but couldn't get it done. The spread was bouncing from .25/.75 to .30/.70. I knew my chance of getting filled at .05 off the mid was slim but was too stubborn to shave another .05 since I like to get .50 in credit for my spreads. ryan
With the market moving bakc higher and that far OTM I am sure the MMs were reluctant to budge but it was worth putting the order in. If we move back lower somewhat tomorrow, try it again but move the strikes up 10 and see what happens. I think 1200 short strike is still a good selection.
I attended the TOS Beyond BAsics seminar in Scottsdale today and confirmed that it will not be a problem with them. I was up in Scottsdale all day and have not had a chance to contact OE yet. I notice that I still have the 9 contracts in my account, even though the bid and ask are identical for the SPX 1205/1195 Put spread. I will call in the morning and ask why the full order has not be filled. Jack
I signed up for the OptionPlanet Beyond the Basics free seminar in Chicago on 1/23. I've never been to a seminar like this, it should be educational and interesting I'm sure. Anybody else going? ryan
I knew my chances of getting filled were slim to none because the quotes were the same or better than the next higher strikes from time to time. I guess a retail trader like me can't play the arbitrage (kinda sorta) game like the big boys. ryan