Posted by DigiNomad on 12th of Oct 2022 at 11:30 am
SPX tail risk trades: been looking into selling premium WAY out
of the money today. Got filled on 6 SPX 1900/1600 put spreads
expiring in 35 days (I'm all alone in the volume so you can verify
trade on the option chain). Had to go 5 bucks below the midpoint
but got $35 for each. It's not much, but checking to see if I would
get filled after noticing that the widths weren't that large on the
tail side (both calls and puts). Anyway, just small but if
it's not free money, then Putin probably went nuclear and we have
much bigger problems than what I would lose on this trade if SPX
went to 1900 in the next 35 days. If the world doesn't end,
this trade should pay for the BPT price increase ;)
1900 and 1600 strikes? I mean that's so far way it's really like
no risk, I'd almost call that arbitrage free money basically. But
what you gain in profit you give up in margin and other things.
when I looked the Nov 17th 1900 Put trading at 0.70 and Nov 17 Put
trading at 0.30 cents, so you make roughly 40 cents
Posted by DigiNomad on 12th of Oct 2022 at 11:48 am
Exactly. I used the spread to reduce the margin hit. Still a
much better 30-day return than what I get with cash at interactive
brokers...which is around 2.5%
Posted by DigiNomad on 12th of Oct 2022 at 11:55 am
I have a 'portfolio margin' account so the margin calculations
take into account the risk of each position via algorithms. I
barely took any hit to margin on this trade but a standard margin
account would be fairly significant with a 300 point wide spread.
Come to think of it, it's probably not worth it unless you have a
portfolio margin account. That didn't cross my mind when I first
posted. Sorry.
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SPX tail risk trades: been
off topic fun while we watch the consolidation and try not to over trade
Posted by DigiNomad on 12th of Oct 2022 at 11:30 am
SPX tail risk trades: been looking into selling premium WAY out of the money today. Got filled on 6 SPX 1900/1600 put spreads expiring in 35 days (I'm all alone in the volume so you can verify trade on the option chain). Had to go 5 bucks below the midpoint but got $35 for each. It's not much, but checking to see if I would get filled after noticing that the widths weren't that large on the tail side (both calls and puts). Anyway, just small but if it's not free money, then Putin probably went nuclear and we have much bigger problems than what I would lose on this trade if SPX went to 1900 in the next 35 days. If the world doesn't end, this trade should pay for the BPT price increase ;)
1900 and 1600 strikes? I
Posted by matt on 12th of Oct 2022 at 11:41 am
1900 and 1600 strikes? I mean that's so far way it's really like no risk, I'd almost call that arbitrage free money basically. But what you gain in profit you give up in margin and other things. when I looked the Nov 17th 1900 Put trading at 0.70 and Nov 17 Put trading at 0.30 cents, so you make roughly 40 cents
Exactly. I used the spread
Posted by DigiNomad on 12th of Oct 2022 at 11:48 am
Exactly. I used the spread to reduce the margin hit. Still a much better 30-day return than what I get with cash at interactive brokers...which is around 2.5%
I have a 'portfolio margin'
Posted by DigiNomad on 12th of Oct 2022 at 11:55 am
I have a 'portfolio margin' account so the margin calculations take into account the risk of each position via algorithms. I barely took any hit to margin on this trade but a standard margin account would be fairly significant with a 300 point wide spread. Come to think of it, it's probably not worth it unless you have a portfolio margin account. That didn't cross my mind when I first posted. Sorry.