I'm going to the TOS Advanced Options workshop in Chicago on 5/31 - 6/3. Anyone else going then? SPX Positions for May so far: May 1365/1375 Call Spread - 8% on margin May 1220/1230 Put Spread - 6% on margin May 1350/1355 Call Spread - 6% on margin -Cash
I am....I guess my legs and I will be out'ed at that time however I am looking forward to it and the windy city...and hoping my daughter will hook up with me on Fri
Hi everyone, got filled with the following today: MAY SPX BTO 1360 Call STO 1350 Call Credit = $0.65 BTO 1245 Put STO 1255 Put Credit = $0.55 Total Credit = $1.20 If all goes well, a 12% return per contract @ $1,000 (not counting commissions). Good luck with your trades. Rookie Rich
it is easy to evaluate today by looking at the same spread as close to the money as you wish. furthermore, the exit price lessens with every passing day making it, discontinuity withstanding, less risky.
In case the wording in my last VIX post was a little too subtle, I'll attempt to be clearer here. From the specification it appears that VIX options for hedging a black swan event are about as useful as: A chocolate teaspoon. A solar-powered telescope. A screen door on a submarine. Herpes. ...unless you happen to be lucky enough to have VIX spot converge with the forward price i.e. just before VIX options expiration. Therefore, better to hedge adverse spot volatility with other vehicles IMHO. Not wanting to start the debate again, just doing my bit to raise awareness MoMoney.
Mo: Problem is you cannot definitively say that a spike to 30 on the VIX will not move the MAY 15 Calls to something close to intrinsic value. So the usefulness cannot be so negatively described unless you have proof that a spike to 30 in the VIX will not cause any movement at all of significance in MAY 15 calls.
I finally opened the TOS account and I will transfer everything from Ameritrade (poor options trading platform). I talked to Scott and He promised same rate as OX. I did it based on your good advices. Thanks
Well the chances of getting whipsawed arent any better than the chances of the spread going against you the minute you open it. Really, I have no clue if i will be whipsawed. However, i look forward to getting whipsawed as it actually helps my strategy rather than hurt it as is the case with a FOTM spread. I dont know what you mean. I dont recall saying anything like that. I try to keep my r/r near 1:3. when i adjust, i either write off the loser completely and cover the loss with the premium of the higher spread or close it at break even(during the dreaded whipsaw) and make 1:3 r/r on the higher spread. A max loss of $2 on a 5 point spread doesnt make sense to me. MoMoney, i agree with you 100% but you are beating a dead horse here. We will find out for sure when the next black swan happens.
After the post by Prevail this morning I played around with the models in TOS a little more (boy am I not getting any work done this morning). I think you may be onto something. The key, as it is with any strategy, is the management of the position. Using additional cash to make an adjustment instead of buying a hedge seems to work well, as long as you have enough cash to make the adjustments. If you have to make 2 or more adjustments you better have a really healthy reserve available to do it with or you could be sunk for a good chunk. I will have to try this out on a small scale with June positions, I haven't found any May positions that would work right now. You put on your May call position right before April expiration right? Any May put positions yet? ryan