I haven't heard. I've messed around a bunch with them. In some ways I like them, in others I still prefer the prophet charts.
Pic...I'm bored too today...its either this or laundry and house cleaning Interesting discussion on the trading thread...going from pit to screen...The traders are complaining that because they aren't on the floor where there is noise they don't have the same "feel"..some even subscribe to "pit noise". I guess this is similar to what I'm saying when I use my senses and trust my senses.
Yes, since we are talking about using SPX credit spreads here to bring in income consitently month after month. It is my impression that this what people here are doing and that's who my comment was addressed at. If your goal is to consistently bring in income month after month, it only makes sense to try and systemize your entries and stick to it. The less discretion(outside of discretion allowed by your system) the better. So if you are going to systemize your entries then you must consider the credit received vs the risk at hand, and the strike selection as it relates to the market price. Lastly, but not least, your position size which should be consistent with your max risk per trade . I am not advocating people follow what i do. Whether you go ATM, OTM or FOTM, an optimal entry does exist when you factor in all these variables which if followed will give you consistency and in my opinion significantly reduce your risk over the long haul. I see very little of that in this thread when you consider the large amount of risk thats being undertaken by most. People seem so in love with the credit they "collect" that they either overlook the other side of the equation or seriously under weigh its importance with regards to the consistency i am talking about. I will end this with this comment - just because something works now doesnt mean it will always work. The longer it works, the closer you get to its END, What price are you paying to find out when that actually is?
Rally, I am not smart enough to understand the big options concepts. I don't know why I should put my trade at the same strike for the same price 5 days ago instead of today. Me I trade base on oversold/overbought and i am here for the bucks not for the big options knowledge.
I agree with your message. Making a process more systematic (and therefore more measurable) can only lead to good things. If I had the time, I'd volunteer but I don't... perhaps someone can capture a table or spreadsheet with some benchmarks for credit spreads?
I agree that the Probability of Touching is more useful then the Probability of Expiring when it comes to defending our positions - or at least sounds like it should be. However I still use POE when putting on and adjusting my positions just because I am used to it. I have found that the POT is about (roughly) twice what POE - especially out of the money. Once I find something that works I tend to stick with it. I have been very happy with TOS probability calculations thus far. I should note that I am using the probability listed on the Trade page and not the Analyze page when looking at this, as they are calculated slightly differently. I also am not a big fan of the "Black Box" approach. I (if push came to shove) could calculate the POE on my own. I wouldn't even know where to start to calculate the POT.
Agreed, some folks defend their position more akin to no-touch exotics in which case probability of touching seems more appropriate.
Apologies, didn't intend to throw your contribution back in your face Here is an unrestricted/summarized version of the article by John that doesn't require registration: http://www.investopedia.com/articles/optioninvestor/03/100103.asp I'll try and dredge up from the depths of my memory why the statistics presented by John in that article are misleading and not really "valuable info". Until then...