Murray, Thanks for the kind words. It was great to meet you as well. Don't go around saying too many nice things about me though. I don't want to ruin my reputation as a hardass on ET. It took me years to earn my rep. LOL. As I've told many on ET, my door is always open. Although I understand most on ET like to live in the shadows. I look forward to your next trip back to Chicago. Anyway I can be of help, let me know. Mav
Wish there was an easy answer you can read in a book. It's very difficult, especially if you havent been through alot of difficult situations and taken hard hits. As someone said before, its only after you've taken big hits that you start putting more weight on risk. I guess if i have to give a suggestion it would be to think about the risk only, and then only consider the profits in the sense that they should compensate you enough for the risk. Then only take those trades where if you woke up tomorrow and you were at your max loss you wouldnt flinch. That should pretty much extend your survival. (That's at the heart of why i dislike high risk positions like the FOTM CS and hardly ever stay naked on the put side for longer than a few days). You dont need to take big risks to make good money in the market but you do need money to be able to take any risks. Not much help i know, but that's all i can think of right now.
Because being nice to me and very helpful and friendly outside of ET was his way of sucking up LOL... Besides I get a bigger kick out of proving people wrong. Most people are so cynical they find it hard to believe someone wants to help others out of pure generosity.
Why would you liquodate at 1290 when your max profit is at 1310? Plus.. your break even is around 1320.... Diagonals are adjustable.... it's not to be played as a delta trade... rather a Vega play. This is why I prefer to use Put Diagonals.. and Call credit spreads. Volatility increases to the down side.. and decreases on the upside. Hope this helps, M~
What I think could work best, is to open your Bull Put (below Support) or Bear Call (above resistance); then you can buy the SPY PUT or CALL at 30 points from your short Strike. This has given me the best protection so far Would be interested to know when you put on the hedge 30 points out is it at current level for strike or closer to short strike of the spread. Question for Piccon
I put the hedge before the index is close to 30 points of my short strike. For example SPX @ 1250 and you have SPX BULL PUT 1220/1210, you may buy SPY 124 for protection. If you buy enough insurance, by the time SPX touches 1220 your SPY124 will provide you with enough money to help pay for any potential loss in the spread or you may make money on both I hope this helps. Risk Mangement (Hedging) is the most important concept I learn from Coach Phil
rally, regarding es options. clearly the margin is significantly less than spx naked, but can you clearly explain how a spread is different than standard spx? to me, an 1150/1140 credit put is the same (except that it represents half the value), but in real percentage terms how can it be any different than spx? tia
Thanks very much. Obviously I am thinking credit spread. The market is moving where I want it to go... If the market continues to move up fast, do I wait to adjust at 1310, 1320, or......? It's a very strange feeling for me to want the market to move towards my short option. AND to want volitility to move UP rather than down. Very odd. Almost like a long option position except with a short in front of it. Gasp....... I have no idea what I am doing.