Thanks MTE for your kind reply. I had done 1st position and when index went up more it was good to do the second position to earn better premium. But now my maximum risk is 100 points which was not my original intention. Is there a good book to read just on spreads?
You risk is no less no more than what the risk on separate two verticals. In fact, what you have is a vertical, which has two verticals embedded in it. That is, any spread that is wider than 1 strike can be broken down into smaller spreads. Don't know a book on just spreads. Good reads, in addition to the usual "must reads", are Cottle's book and "The Option trader handbook" by Jabbour and Budwick.
well...you do know exactly what your profit is NOW...but it may make sense to do 1/2 & 1/2 just for comparison/learning purpose. GL
I also went LONG Patience but my wife is looking to SHORT temper lol.. By the way, if any of you are in the Washington, D.C. area I am going to be speaking at the Money Show on July 21st (from the same people who do the Trader's Expo). Stop by and say hi! I am gonna give the same seminar that I gave in Ft. Lauderdale (call ratio spreads on stock positions). It is free to attend and there are always futures and option seminars and products and thinkorswim is always there!
He runs a hedge fund which does a lot of calendar spreads last I heard a few years ago but I am sure he makes 7 figures from optionetics
Thanks MTE I have looked the contents of the book and looks interesting. I am trying ESTX50 because they have weekly options and futures index so margin is favourable
I did not recommend this trade. Merely replied to question regarding ease and feasibility for a public customer to open position with extra protection.
Okay, so back to actually trading. The SPX is up +9.50 before the fed, how does the 1295/1300 for .85mid or 1295/1305 for 1.40mid sound? What's the general consensus among the talking heads? .25 increase and then we fall slowly? Anyway, is anyone going to put on a position today BEFORE the announcement, or is everyone waiting for the announcement and the trading the fade? Peace and let's get back to making some $$.
fully positioned on th short side for two weeks. i'll look to take some off the table today before the meeting.
I think putting on a position before the Fed announcement is too much of a gamble since we have no clue how the market is going to react to whatever Bukake says. We are up strongly this morning on anticipation but basically we have gone sideways the last week or so. Gonna wait and see what happens and if the move is strong enough then look for July. If time is too short then I miss July and look for August. I do not mind investing in cash while the market plays out which is better than rushing into a position just because you do not want to let July go by without a position. So better to wait and see...