My whole arguement is just that, the need for adjustment. The wider the spread the more aggressive the adjustment which eats up bigger part of your credit. Now in periods like dec 05 through today this isnt too much of an issue but during periods with high volatility, doesnt even have to be too much higher than todays, maybe 10-20% higher, this approach will really eat up those gains quickly. By arbitrarily picking points in time and widening/shortening strikes for the sake of a better credit you are more likely to hurt your overall gains. Now i am a big fan of varying position sizes or even widening strikes, when its a part of a consistent risk management plan but i dont think this is the case here. Even though, i may not do coach's strategy over the long term, i see clear consistency in his approach when it comes to risk management. Consitency, that others lack and thats exactly what's the biggest harm to that position.
Hey Coach, Just back from the seminar. It was on Wyman street in an office park, right off rte 128. Tom from TOS was excellent. Those guys are nice and knowledgeable. It will take me a few hours to empty all the info onto some paper. He covered plain vanilla vertical spreads, butterflys, double diagnals and calendar spreads. It was a ton of info for one day, but I thought it was great. Lots to think about.
Does anyone here use the Ansbacher Index? If so where do you find this data. Does anyone have a spreadsheet they use to calculate this index.
Current Position for May with ToS 1235/1245 PUTS 0.90 Credit entered on 4/17 1340/1350 CALLS 0.50 Credit entered on 4/17 ----- Total 1.40 I'm a little concerned about the call side.
I haven't spoke to them about it yet, but from what people have said on this forum it seems you need to be doing 10 lots for that rate I only do 5 lots but I'll give it a shot anyway.
Cool, I went to college in Waltham (I am sure you know which college is there lol). I have not been back to Waltham since 1994 though so no memory of the streets. I did work at the Boys & Girls Club in the downtown area (the bad part of town).
I know exactly where you went! I've lived in the area my whole life, except when I did a 4 year stint in Providence (the Seattle of the East Coast, in terms of rain!). Cody
Rally, What I think you are driving at is that your relatively close to the money spreads are less risky because you bring in more premium with less dollars at risk. If/when your position is threatened, you roll to a new position with more contracts (kind of a Martingale type of adjustment in a way I guess). This type of adjustment can put you around breakeven or even small profit if all works well for the month given a max loss of $2 per $5 spread as you claim in a recent post (I hope I'm not misrepresenting what you said). Given that you are closer to the money, aren't the chances of getting whipshawed while making adjustments somewhat good? I've been modeling some spreads similar to what you have been talking about (a May 1275/1280/1335/1340 IC) and assuming a max loss of $2 on one side and then making an adjustment. It looks reasonable that one could take in a good credit while using less margin. I guess the test for me would be to see what happens when one of your shorts (or longs) is hit and you adjust, then I can see if things work out as they are being described. I've got that nagging feeling I'm missing something so please don't flame me if I am. Just point it out and I will go back and crunch the numbers some more. ryan