I am creating vertical spread call and put options on extended
prices. Pro: I like that the position can only loose the cost of
the options plus fees. Con: They expire and picking the price and
duration is judgmental.
Do any of you trade these? If so I would like to hear your
thinking.
PS: They might even be a good way to trade the SPY systems using
in the money short term spreads.
Posted by sschulman on 7th of Dec 2016 at 12:05 am
Jroger I almost only trade ES options. and sometimes rarely an
ES future.
I sell out-of-money call and buy a further-out-of-money
nearer-term call to hedge. So you could call it diagonal calendar
credit spreads. Are your vertical spreads credit or debit? Years
ago I did verticals but kept losing but in retrospect my strikes
were way to close to where the futures were.
I'm sort of trading the spy system by selling out-of-money ES
puts when spy system is long.
Interesting, do you mostly expect to close out the position at
or before hedge expires? I look trades for a modest debit
position where they spread is reasonably likely and the return is
about three times the cost. I do this when I am betting on
the move and want to limit my exposure to the entry price if I am
wrong. I am tuning my selection criteria.
thanks for sharing roger! I don't personally do much
options trading, it's one area that I am lacking in knowledge. I
know the basics but that's about it. I do options sometimes,
when I do I play deep in the money options so that I am not paying
for time premium, and I generally do about 2 months out. If
SPY is trading at 221, and SPY system is long, I might buy the Feb
180 options or something, so that I can get almost a dollar per
dollar move
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Vertical Spread Options: I am creating
Posted by jroger on 6th of Dec 2016 at 04:18 pm
Vertical Spread Options:
I am creating vertical spread call and put options on extended prices. Pro: I like that the position can only loose the cost of the options plus fees. Con: They expire and picking the price and duration is judgmental.
Do any of you trade these? If so I would like to hear your thinking.
PS: They might even be a good way to trade the SPY systems using in the money short term spreads.
Jroger I almost only trade
Posted by sschulman on 7th of Dec 2016 at 12:05 am
Jroger I almost only trade ES options. and sometimes rarely an ES future.
I sell out-of-money call and buy a further-out-of-money nearer-term call to hedge. So you could call it diagonal calendar credit spreads. Are your vertical spreads credit or debit? Years ago I did verticals but kept losing but in retrospect my strikes were way to close to where the futures were.
I'm sort of trading the spy system by selling out-of-money ES puts when spy system is long.
Interesting, do you mostly expect
Posted by jroger on 7th of Dec 2016 at 06:14 pm
Interesting, do you mostly expect to close out the position at or before hedge expires? I look trades for a modest debit position where they spread is reasonably likely and the return is about three times the cost. I do this when I am betting on the move and want to limit my exposure to the entry price if I am wrong. I am tuning my selection criteria.
thanks for sharing roger! I
Posted by matt on 6th of Dec 2016 at 04:59 pm
thanks for sharing roger! I don't personally do much options trading, it's one area that I am lacking in knowledge. I know the basics but that's about it. I do options sometimes, when I do I play deep in the money options so that I am not paying for time premium, and I generally do about 2 months out. If SPY is trading at 221, and SPY system is long, I might buy the Feb 180 options or something, so that I can get almost a dollar per dollar move