im not with TOS im a big IB fan, and I know what you mean by the single line quote for spreads/combos. However, you can only quote, cannot place orders on futures options as spreads using TWS, you have to leg in. Globex doesnt recognize combo orders with options. Unless you have a secret version of TWS that isnt available to the public
Cache, thanks for your response. I understand what you mean regarding once the P&L line starts going down how with a 30 point spread it would take a bigger move ITM to get to max loss as compared to a 5 or 10 pointer. However, I'm just not comfortable doing 30 point spreads because the margin requirement is so large ($3,000 minus credit received) plus it looks like the % return for the $ invested isn't necessarily better. Once I figure out where I'd like to open my short options, I typically do a 5 and 10 point analysis using the OX credit/margin calculator to figure out which credit received is the biggest % return for the $ invested. Sometimes the 10 point ($1,000 less credit) has a larger % gain but sometimes it a 5 point ($500 less credit). Rookie Rich
funny you ask.......yes. i currently have a 1310/1315 call credit spread that i received 2.6 (may)....... without getting off topic, any idea's?(beyond my own of course)
>Do 30 point spreads generate a greater % return than a 5 or 10 point spread? I don't think in terms of return, but risk management. A 30 pt spread allows me to place my shorts further away with a decent premium, and, in this case, it was just the right amount to balance the call side of my position. Just a matter of style. >Also I think you mean a credit of $1.10. I am in the futures, so I use ticks. 110 ticks = $275.
wow I certainly don't have any good ideas...Rallymode might? The reason I ran into your posts is back in Oct/Nov/Dec we had some very challenging spreads to deal with...so I was reading to try and remember what I was thinking when I rolled my Dec short call (1285 to 1295). I rolled that on Nov 25 and I think because the market was moving up strongly still and I had a ways to go before Dec exp. With just 9 days of trading and a 25% chance of landing in the money with my 1340 call I'm leaning toward holding out for more theta. I will close my put spread (try to today) and be ready to open another p/s on Friday to help pay the costs of rolling the call if necessary. I'd love to be able to game B's speech today ( buying a higher call spread before the speech and selling the 1340/1350 after the speech assuming the mkt goes down). Not wild about that idea even though Coach SAID we'd go down...he can't be right TWICE in a week can he? (nice call on the up move when we were churning in no-man's land last week)
Unless I'm missing something, I'm sure Cache is assuming that the same amount of margin is invested in each scenario. So you'll have 6 times as many positions with the 5 point spread as with the 30 point spread. To compare 10 - 5 point spreads with 10 - 30 point spreads would not be fair. To me it makes sense to keep the margin the same for the comparison: so 60 - 5 point spreads versus 10 - 30 point spreads. So in your hypothetical, the loss would be $2700 for the 5 point spread where the SPX finishes at 1360 (I think I calculated that right). Edit: For the purposes of setting up a hypothetical comparison, my definition of margin here does not include any credits received. However, the 'loss' for your hypothetical does.