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• Stephen Cooper

Home >> Stock Forums >> March07 Iron Condor SPX or RUT?

March07 Iron Condor SPX or RUT?

holzie said: "As I said at the conclusion of the Feb07 SPX thread, I am sitting tight until the market reacts after the Fed meeting, so coming Feb 1st I will be looking for a new trade. Now here is the dilemma: SPX vs. RUT Both are 5,000 pound index gorillas, both are European style indexes. The SPX is slightly less volatile, historically. The SPX is NOT traded on multiple exchanges -- low competition, hard fills, larger spread. The RUT is traded on multiple exchanges -- competition, tight responsive spreads, electronic fills. On top of that, when applied to potential trades with same probabilities, the RUT seems to yield 20% better premiums on the MARK, which with RUT is not difficult to get, but with the SPX, you have to cave in 0.05 or 0.10 per contract to get filled at the exact index price or wait until the market moves slightly in your advantage to get the fill. So basically what I am saying here is that I will use the next 3-4 days to back test my SPX trading against the RUT to get a better picture. But I will have to place actual trades to really see for myself how much easier the fills get compared to the SPX. Some people complain about the SPX because of the hard to get fills but I guess for me after trading it for a while I didn't really notice it. Last thing, since the volatility is as much as 2x the SPX the theta is double the SPX, which combined with easy execution sounds better. Any ideas? Holzie."

drdan said: "Risk vs Reward Holz. I like the RUT for your way of trading because you can take advantage of the higher volatility with better credits. (High Volatility good for selling) However because of that volatility you either have to place the spreads farther away from the current price (defeats the purpose of better credits) or watch it closer. Too volatile for the way I trade by waiting till expiration, but as I emailed you before I do like your way of trading and I think the RUT would be a better index for it. You just have to pay attention a little closer but since you are already doing that it should not be a problem."

bklambco said: "I've traded the RUT, It does have better premium, you do have to be further away from the heat of the fire, When it moves it moves in quite a few points at a time. Be carefull, back test it, it is a different animal than spx. RUT is the one that hit me pretty bad in oct/nov OEX is more stable closer to spx. Example trades going on for Feb from a service my friend belongs to. Date Asset Order Strategy symbol Strike Limit Capital Allocate ROI Status 1/9/07 RUT STO Bear Call RUZBH Feb Call 840 $0.50 $9.50 20% 5.3%Filled BTO RUZBJ Feb Call 850 1/9/07 RUT STO Bull Put RUYNR Feb Put 690 $0.50 $9.50 20% 5.3%No Fill BTO RUYNP Feb Put 680 I know you wont like these credit is to small, but at a later date or on an up day or good down day the credit moves fast. These trades are very conservative they give an idea how far way to be. For you you may want to get closer to the money. Here is a starting point. Take care. [QUOTE=holzie]As I said at the conclusion of the Feb07 SPX thread, I am sitting tight until the market reacts after the Fed meeting, so coming Feb 1st I will be looking for a new trade. Now here is the dilemma: SPX vs. RUT Both are 5,000 pound index gorillas, both are European style indexes. The SPX is slightly less volatile, historically. The SPX is NOT traded on multiple exchanges -- low competition, hard fills, larger spread. The RUT is traded on multiple exchanges -- competition, tight responsive spreads, electronic fills. On top of that, when applied to potential trades with same probabilities, the RUT seems to yield 20% better premiums on the MARK, which with RUT is not difficult to get, but with the SPX, you have to cave in 0.05 or 0.10 per contract to get filled at the exact index price or wait until the market moves slightly in your advantage to get the fill. So basically what I am saying here is that I will use the next 3-4 days to back test my SPX trading against the RUT to get a better picture. But I will have to place actual trades to really see for myself how much easier the fills get compared to the SPX. Some people complain about the SPX because of the hard to get fills but I guess for me after trading it for a while I didn't really notice it. Last thing, since the volatility is as much as 2x the SPX the theta is double the SPX, which combined with easy execution sounds better. Any ideas? Holzie.[/QUOTE]"

holzie said: "I see it. Dan emailed me and told me that RUT is a little different breed as well, BUT the way I had to trade my condors past 2 months, RUT is actually better suited for my style than the SPX. Let's remember, I avoid expirations by 1-2 weeks, but I get in 1-2 weeks early. One thing I have to disagree with is that RUT is "more dangerous". I do not come in and say "I want to be 50 points away on the upside and 60 points away on the downside." It's all about current at the money implied volatility, that's how you calculate standard deviation [ (price*atm volatility)/ square root of time)]. So the IV for SPX is 11.26% and the IV for RUT is 17.12%. Hence, the same risk, slightly better reward, which is why I made my initial argument. I compared the same exact probability trades with the SPX and RUT based on their volatility and RUT just yielded much better results. Truth be told, would I want to hold RUT till expiration? Hell no, I don't want to hold anything till expiration. As I said before, the problem with doing adjustments starting 2 weeks before expiration is that your maneuvers are so limited due to the ridiculously low premium received if rolled up/down. The only way to save yourself at that point is roll up/down into the next month to break even on the loosing spread (you will still make money on the opposite spread though). That's why condors, due to their stinky risk/reward ratio need to be taken so seriously -- theta is not the most powerfull friend here because delta will take theta out with her hand tied behind her back. Back to adjustments. I absolutely positively think that if a retail trader does not have software like the one for TOS or OptionVue and does the condors, it's just a matter of time before he hands the money over to the market makers. Adjustments is the key in options trading -- you can make anything work (unless you are doing straight puts/calls or being naked)...you can make a condor out of a butterfly and vice versa, diagonal out of a credit spread, calendar out of a credit spread....you just have to be there. If somebody thinks they can subscribe to a service and take their word for a monthly range on a condor and just sit back and watch, they are crazy. I remember my first credit spread 8 months ago, flat market but scarred the shit out of me and that's when I realized I need to move with the market, take profits early when they come, and have a plan at the beginning of the trade. Last month I added another weapon to my asrenal of adjustments -- selling the atm butterfly against my position for free margin. This works great in a trend or at the end of a trend. The theta for atm options is a true monster. Bottom line, it's no different from trading stocks in a sense that you have to watch the company all the time to help you simulate what's coming. You can't just buy an ethanol stock and let it ride because you think ethanol is great. I found a good trade I am about to post. I would eventually place it if market conditions are right. There is nothing wrong with sitting out. Holzie."

bklambco said: "RUT ... Go for it Holzie!, it is perfect for you and your style. Giant sized credits. I had a call spread in Aug I had gotten in at 1.80 credit it got threatened so I closed it out rolled it up in the same month for 7.80 credit, week later bought it back for 3.50 credit. RUT can be fun. Guy on Elite.trader.com called Piccon runs about 10 to 30 points close to the fire, uses support and resistance points to tell him how close he can get. I see that for Feb he pulled down 8.60 credit couple weeks and bought back at 1.50, Just sould another spread Friday for 2.60 credit. Say how much was Base and commsions for TOS again? IB has all the basic tools for options but not everything I want so I have a bunch of free tools I use at scattered sites including optionvue, hoadly not fun. Does TOS have a good scanner that will say find me all spreads > .50 cents etc? [QUOTE=holzie]I see it. Dan emailed me and told me that RUT is a little different breed as well, BUT the way I had to trade my condors past 2 months, RUT is actually better suited for my style than the SPX. Let's remember, I avoid expirations by 1-2 weeks, but I get in 1-2 weeks early. One thing I have to disagree with is that RUT is "more dangerous". I do not come in and say "I want to be 50 points away on the upside and 60 points away on the downside." It's all about current at the money implied volatility, that's how you calculate standard deviation [ (price*atm volatility)/ square root of time)]. So the IV for SPX is 11.26% and the IV for RUT is 17.12%. Hence, the same risk, slightly better reward, which is why I made my initial argument. I compared the same exact probability trades with the SPX and RUT based on their volatility and RUT just yielded much better results. Truth be told, would I want to hold RUT till expiration? Hell no, I don't want to hold anything till expiration. As I said before, the problem with doing adjustments starting 2 weeks before expiration is that your maneuvers are so limited due to the ridiculously low premium received if rolled up/down. The only way to save yourself at that point is roll up/down into the next month to break even on the loosing spread (you will still make money on the opposite spread though). That's why condors, due to their stinky risk/reward ratio need to be taken so seriously -- theta is not the most powerfull friend here because delta will take theta out with her hand tied behind her back. Back to adjustments. I absolutely positively think that if a retail trader does not have software like the one for TOS or OptionVue and does the condors, it's just a matter of time before he hands the money over to the market makers. Adjustments is the key in options trading -- you can make anything work (unless you are doing straight puts/calls or being naked)...you can make a condor out of a butterfly and vice versa, diagonal out of a credit spread, calendar out of a credit spread....you just have to be there. If somebody thinks they can subscribe to a service and take their word for a monthly range on a condor and just sit back and watch, they are crazy. I remember my first credit spread 8 months ago, flat market but scarred the shit out of me and that's when I realized I need to move with the market, take profits early when they come, and have a plan at the beginning of the trade. Last month I added another weapon to my asrenal of adjustments -- selling the atm butterfly against my position for free margin. This works great in a trend or at the end of a trend. The theta for atm options is a true monster. Bottom line, it's no different from trading stocks in a sense that you have to watch the company all the time to help you simulate what's coming. You can't just buy an ethanol stock and let it ride because you think ethanol is great. I found a good trade I am about to post. I would eventually place it if market conditions are right. There is nothing wrong with sitting out. Holzie.[/QUOTE]"

holzie said: "[QUOTE]Guy on Elite.trader.com called Piccon runs about 10 to 30 points close to the fire, uses support and resistance points to tell him how close he can get. I see that for Feb he pulled down 8.60 credit couple weeks and bought back at 1.50, Just sould another spread Friday for 2.60 credit.[/QUOTE] Yeah, I noticed. He does it full time though and not like me, adjusting during lunch hour. He does have a valid point though. Though it doesn't seem so, he does have less risk than all of us combined. If he takes in 8.60 credit, his risk is only 1.40 and this is absolutely acceptable risk position when managed actively. I will stick with what I know: probabilities and deltas, but we do seem to have one in common. He will be selling call spreads on UP days and selling put spreads on DOWN days, which is very very smart. As he is selling/re-sellingone, he is buying the other back for profit....50% here and there way early...bottom line, he is still doing the same damn iron condors we do, but he is using the market for additional points :) I will be entering the March07 840/850 Call spread if/when RUT +5 or more AND/OR March07 730/720 Put spread if RUT -5 or more. Either spread @1.20 credit minimum. This will give me over 1 std on the upside and a little over 1.5 stds on the downside. I am not gonna change my style, just because I change indexes. I have been there and done that with vision of "quick" profits last year. This is a business and I treat it like one, and hoping that I take in a gadzillion in credits and it will somehow work itself out would not be a good business plan. [QUOTE]Say how much was Base and commsions for TOS again? IB has all the basic tools for options but not everything I want so I have a bunch of free tools I use at scattered sites including optionvue, hoadly not fun. Does TOS have a good scanner that will say find me all spreads > .50 cents etc?[/QUOTE] There is no base with TOS, my commission is $1.50 per contract. I know I can get you the same rate. I know that some ballers pay like $0.60 per contract. Basically, they are very flexible. I trade maximum of 3 to 5 (times 4) contracts at a time so it's working out for me. See, OX was too expensive for the way I traded and they didn't want to adjust to my trading, they just said to start trading 4*10 contracts at a time and I will come out cheaper...but see that might work out if you do everything boom-boom at once but I do it slowly, sometimes in thirds to get a better overall price so I know that I will always pay the same no matter what size I trade. This way, commission consideration is completely out of the picture for me and allows me to take profits when I want to and how I want to. Plus I LOVE the platform, OX can't touch it. Yeah, they have something called Spread Hacker and it kinda pre-screens different strategies, you just adjust the criteria you want, then select it, and bring it to your analyzer, where you can further tweak it to fit your risk profile and then play with the trade to see what would happen if.......I used it a lot at the beginning to learn about different strategies outside what I knew well. I still learn the strategies in their PaperMoney. It's a great tool because it is basically the same platform but not real money. I have some calendar spreads that I am tweaking right now to see if I can handle them with real money. Again, it's all about knowing what to do when you need to adjust. Hope it helped. Holz."

bklambco said: "Perhaps you could invest in one of those Pocket PC cell phones so you can watch anywhere and place even while you are out to lunch eating. That might be a great option. When I was trading Forex I thought about getting one, but I ended up getting a small powefull laptop with a sprint wireless modem. So the market is always right next to me. I spend 15 mins driving to Ferry boat, boat has wireless conections, at work my laptop is right next to my work computer. If your work is very restrictive the Pocket PC with TOS on it should work out. Was trading forex on 5 min,15 min and 1 hour charts trading strickly on TA indicators Forex market is a 24 hr market. Say if you can help me me get a deal on TOS at 1.50 per contract and no base fee I just might switch from IB. So a one contract iron condor would cost 6.00 right? No monthly exchange fees? Ib platform is complex and I have mastered it, hope TOS will not take to long to figure out. It would take me a while to shut down IB and roll into TOS. Any volume requirements to be able to at 1.50? Yeah Piccon does it full time, but if you move your stikes a little further out than him you should be able to let it ride without watching it like a hawk. I will plug in your planned trade and take a look later to see how it plays out. RUT does have good credits, RUT headquarters are in my back yard in Tacoma Washington, that is where the index is maintained, about 40 miles from where I live. [QUOTE=holzie]Yeah, I noticed. He does it full time though and not like me, adjusting during lunch hour. He does have a valid point though. Though it doesn't seem so, he does have less risk than all of us combined. If he takes in 8.60 credit, his risk is only 1.40 and this is absolutely acceptable risk position when managed actively. I will stick with what I know: probabilities and deltas, but we do seem to have one in common. He will be selling call spreads on UP days and selling put spreads on DOWN days, which is very very smart. As he is selling/re-sellingone, he is buying the other back for profit....50% here and there way early...bottom line, he is still doing the same damn iron condors we do, but he is using the market for additional points :) I will be entering the March07 840/850 Call spread if/when RUT +5 or more AND/OR March07 730/720 Put spread if RUT -5 or more. Either spread @1.20 credit minimum. This will give me over 1 std on the upside and a little over 1.5 stds on the downside. I am not gonna change my style, just because I change indexes. I have been there and done that with vision of "quick" profits last year. This is a business and I treat it like one, and hoping that I take in a gadzillion in credits and it will somehow work itself out would not be a good business plan. There is no base with TOS, my commission is $1.50 per contract. I know I can get you the same rate. I know that some ballers pay like $0.60 per contract. Basically, they are very flexible. I trade maximum of 3 to 5 (times 4) contracts at a time so it's working out for me. See, OX was too expensive for the way I traded and they didn't want to adjust to my trading, they just said to start trading 4*10 contracts at a time and I will come out cheaper...but see that might work out if you do everything boom-boom at once but I do it slowly, sometimes in thirds to get a better overall price so I know that I will always pay the same no matter what size I trade. This way, commission consideration is completely out of the picture for me and allows me to take profits when I want to and how I want to. Plus I LOVE the platform, OX can't touch it. Yeah, they have something called Spread Hacker and it kinda pre-screens different strategies, you just adjust the criteria you want, then select it, and bring it to your analyzer, where you can further tweak it to fit your risk profile and then play with the trade to see what would happen if.......I used it a lot at the beginning to learn about different strategies outside what I knew well. I still learn the strategies in their PaperMoney. It's a great tool because it is basically the same platform but not real money. I have some calendar spreads that I am tweaking right now to see if I can handle them with real money. Again, it's all about knowing what to do when you need to adjust. Hope it helped. Holz.[/QUOTE]"

holzie said: "[QUOTE]Say if you can help me me get a deal on TOS at 1.50 per contract and no base fee I just might switch from IB. So a one contract iron condor would cost 6.00 right? No monthly exchange fees? Ib platform is complex and I have mastered it, hope TOS will not take to long to figure out. It would take me a while to shut down IB and roll into TOS. Any volume requirements to be able to at 1.50?[/QUOTE] You just send me a pm when you want to switch and I will tell you who to ask at TOS for the hookup :) You can also just register and download the TOS software for 30 days for free, I think. HOlzie."

bklambco said: "Great I'll play with the software for awhile. [QUOTE=holzie]You just send me a pm when you want to switch and I will tell you who to ask at TOS for the hookup :) You can also just register and download the TOS software for 30 days for free, I think. HOlzie.[/QUOTE]"

holzie said: "Ok, so RUT was up today so I opened the call spread. I was entering in stages so I am going to post the averaged prices and the post is going to be based on only 1 contract. It's not important how many contracts I trade. -1 RUT March07 830 call +1 RUT March07 840 call ---------------------------- Credit: 1.90 Margin Req: $1000 Risk: $1000-190 = $890 Return on Margin: 19% Return on Risk: 21.35% Days till expiration : 45 Planned hold time 20-30 days This is just one side of the iron condor. I will have to wait for RUT to dip, at least 8-10 points to consider the March 740/730 Puts @ 1.40 credit (currently 1.05, day high 1.30). I am willing to wait until the end of the week for the fill, at which point I would enter at best price/strike. I really liked the fills on the RUT, very responsive. Doesn't matter if you trade 1 or 100 contracts, no MM to deal with that might push your order to the bottom of the stack :) I imagine the expiration week is not as bad as the SPX based on this - not that I would care, because by expiration I am gonna be in the April contracts for a few weeks. Holz."

drdan said: "Holz, Let me have you clear up something ...your exit strategy if the market goes wrong. You are 40 points out with your call spread right now on RUT. When and why would you close out the trade early as the market moves up towards your sold call? I have an idea but I would like to hear (read) your explanation. Thanks Oh and how much of a loss or gain does the simulator suggest you will have, obviously it depends on time decay vs upward movement, but about how much of a loss with these three choices... right after you placed the trade, at about 15 days into the trade, and then right before you would normally close out. The more I look at this the better I am liking the method. Using this method plus mine I could have a constant flow of credit every 2 weeks or so!"

holzie said: "[QUOTE]Let me have you clear up something ...your exit strategy if the market goes wrong. You are 40 points out with your call spread right now on RUT. When and why would you close out the trade early as the market moves up towards your sold call? I have an idea but I would like to hear (read) your explanation. Thanks Oh and how much of a loss or gain does the simulator suggest you will have, obviously it depends on time decay vs upward movement, but about how much of a loss with these three choices... right after you placed the trade, at about 15 days into the trade, and then right before you would normally close out.[/QUOTE] [B]1.) When and why would you close out the trade early?[/B] It would depend on how much time is left. The later in the game, the more concerned I am because it would be hard to maneuver out of it. I am looking for a 820 breach and a 820 close, that's very important. If it closes at 820 (+/- 1 point) I am rolling out of my 830 short strike. The other time I would get out of the call spread is if RUT went to or below 780 in the next 2 weeks because the spread would be worth about 0.30 and I sold it for 1.90, taking profits way early. And this is why I like this strategy because you have a 50/50 chance that you will close at least one leg way early, allowing you to re-sell on an up move, and still getting a decent (0.70 and above) premium. Ok, now I am going to describe the 3 scenarios you asked me about. To do this, we have to assume that I am already in both spreads (puts and calls). As I said, I gave myself till the end of the week for opportunity to sell the put spread, but if there is no big pullback, I will be careful to choose a strike that will yield 1.00 or better credit (right now it is the 740/730). [B]Scenario 1:"how much of a loss with these three choices... right after you placed the trade?"[/B] RUT 830/840C Spread: Credit 1.90 RUT 740/730P Spread: Credit 1.00 ----------------------------------------------- Total credit 2.90 (time number of contracts) Time till expiration 43 days If RUT = 820.00 -->830/840 spread buy back = 4.40 debit Actions to take- call spread: 1) Buy back 830/840 @ 4.40 2) Sell 850/860 @ 2.75 put spread: 1) Buy back 740/730P @ 0.18 2)Sell 760/750P @ 0.70 ----> New credit = 2.75 + 0.70 = 3.45 Old credit = 2.90 - 0.18 = 2.72 --> Total credit 2.72 + 3.45 = 6.17 Total credit - adjustment debit = new condor yield 6.17 - 4.40 = 1.77 --> 17.7% on margin. These values were provided by OptionsXpress pricer, so they are not 100%, however I used them for both credits and debits so it will wotk out this way in the end. You can see that this adjustment "cost" us some yield, we went from 29% initial max to 17.7% adjustment max, so based on my trading I would probably come home with 10% overall. Bottom line, I wouldn't loose money, but I could have lost my risk (margin-credit) if left alone and RUT continued to move. The other side, puts, would workout a little better because a) the buy back debit wouldn't be as high and b) I received almost 2x the premiums on the calls so that's a really nice cushion right there. [B]Scenario 2: "at about 15 days into the trade,"[/B] RUT 830/840C Spread: Credit 1.90 RUT 740/730P Spread: Credit 1.00 ----------------------------------------------- Total credit 2.90 (time number of contracts) Time till expiration 28 days If RUT = 820.00 -->830/840 spread buy back = 3.80 debit Actions to take- call spread: 1) Buy back 830/840 @ 3.80 2) Sell 850/860 @ 2.00 put spread: 1) Buy back 740/730P @ 0.05 2)Sell 770/760P @ 0.50 ----> New credit = 2.00 + 0.50 = 2.50 Old credit = 2.90 - 0.05 = 2.85 --> Total credit 2.85 + 2.50 = 5.35 Total credit - adjustment debit = new condor yield 5.35 - 3.80 = 1.55 --> 15.5% on margin. Still profitable, time till exp. is 28 days but my expiration is more like 14 days, which is why I rolled up the puts 1 strike higher than the previous scenario. [B]Scenraio 3:"how do I look whe I close the trade as planned[/B] RUT 830/840C Spread: Credit 1.90 RUT 740/730P Spread: Credit 1.00 ----------------------------------------------- Total credit 2.90 (time number of contracts) Time till expiration 15 days If RUT = 790.00 --> Actions to take- call spread: 1) Buy back 830/840 @ 0.60 put spread: 1) Buy back 740/730P @ 0.15 ----> 2.90 - (0.60+0.15) = 2.15 = 21.5% return on margin. At this point I would be looking for April contracts with similar entry. [B]Scenario 4:"The ugly one[/B] RUT 830/840C Spread: Credit 1.90 RUT 740/730P Spread: Credit 1.00 ----------------------------------------------- Total credit 2.90 (time number of contracts) Time till expiration 15 days If RUT = 820.00 --> Actions to take- call spread: 1) Buy back 830/840 @ 3.00 put spread: 1) Buy back 740/730P @ 0.05 ----> 2.90 - (3.00 + 0.05) = -0.15 = -1.5% Loss on margin. I would be entering April contracts, especially on the call side -- very very BEAR call spread, because of the run-up. I would not try to "make up" for previous month though. You can't winn them all obviously. There is one more adjustment that I will not go into details but let's say that this unlikely situation happens...RUT runs up 50 points and it is at 840. First, of all I would already be in adjustment scenario #2, and with 14 days till expiration, I would roll the March 850/860 into April 850/860, not loosing money, but forgoing any gains on the call spread for March, The put spread would be the only one making money for me that month. That's my plan for this month anyways. Holz."

drdan said: "Excellent explanation, very detailed more than I expected but a great way for others to learn. Rolling up into the next level on condors is still profitable whereas on simple Bear Call or Bull Put Spreads may not be. You use 820 because this is resistance or some other factor?"

holzie said: "[QUOTE=drdan]Excellent explanation, very detailed more than I expected but a great way for others to learn. Rolling up into the next level on condors is still profitable whereas on simple Bear Call or Bull Put Spreads may not be. You use 820 because this is resistance or some other factor?[/QUOTE] Yeah, that's a great question. I don't think 820 is resistance at this point, far from it. I think resistance is 800-805. I chose 820 because it is 10 points away from my 830 short call. It's just a mental point, nothing else. The 830 was pre-selcted based on 1st strike outside 1 standard deviation. [QUOTE] Rolling up into the next level on condors is still profitable whereas on simple Bear Call or Bull Put Spreads may not be. [/QUOTE] Yes, exactly, this is very important. If you just have one spread and adjust, you are always in trouble by hardly breaking even or worse, taking a loss. With iron condors when you are adjusting means that one side didn;t go as planned and it will cost you a little, but it also means that the other side is winning BIG (80-90% of max profit). So you are adjusting and taking profits at the same time, then rolling up/dwn BOTH sides...this is very important. With each adjustment, you are essentially entering an entirely new condor with same month's contracts. As you saw from my scenarios, the large time remaining and the market movement essentially makes you come out on top with a very nice profit -- over 15% in most cases. Now, would you be screwed if the market (SPX or RUT) "crashed" 100 points in one day? Probably so, event hough with enough time left, you could resell at completely different levels and offset maximum loss. That's why it is a good idea to check the market at least once on the intraday for "unusual" activity. But here we are talking about a 3-4 standard deviation move in one day. Holz."

Rbreb13 said: "That was a very enlightening post. It made what you're doing so much clearer to me now. Its obvious that its not simple by any means but I really like the way an Iron Condor can limit your risk."

holzie said: "[QUOTE=Rbreb13]That was a very enlightening post. It made what you're doing so much clearer to me now. Its obvious that its not simple by any means but I really like the way an Iron Condor can limit your risk.[/QUOTE] I am glad it helped out. That's what we are all about here. Really the main point of all this should be that you have to know what to do before you get into the trade. You don't have to have it worked out to the penny, and you won't since you are using option pricing models only based on CURRENT volatility, but when or if the market really moves that big, you don't start panicking-- you know what you are going to do and just execute the plan. Options and iron condors allow you to go with the market and still make money, you just have to listen to the market and not fight it by hoping. If the market is going up, respect it, roll up -- if the market goes down, respect it and roll down --> either way there is money to be made. In my relatively short experience with iron condors, consistency is important. If I do 45 day out condors and close 1-2 weeks before expiration, I will do it month after month the same way. The minute I hold till expiration for the "extra" nickels I will start doing 30 day out condors and my whole cycle is off for next 2 months. Also, you don't have to be in the market every single day. If you close early and it's 55 days out, I will sit till my 45 day mark unless there is an upside or downside opportunity to open a spread. The first 2 weeks of my condors, time decay is really not helping that much. It's more about being in for the market swings in either direction. The last 2 weeks of my condors, the theta really starts eating it up and if you are lucky enough for the market to move, you can get out get out very close to your max profit. It's a matter of taking 60% of max profit or 80%.....I don't measure it, I take it when it comes and don't look back for "what ifs...and should haves" I would really like to continue doing well to complete the year (5 months to go) without a single breakeven or lost condor. Than I can tell you if my shit works or not :) Holzie."

Handy Chandra said: "Dear Holzie, Your detail explanation for iron condor is VERY GREAT. Appreciated very much !!!! Would you also explain, how to do the adjustment credit vertical spread on stock. What's the point to roll up or down ? Is the +1 or -1 standard deviation ? On your IC using 10 unit spread from the sold leg as baseline for rolling up/down (adjustment). Thanks in advance. Best regards,"

rrvball said: "Holzie, Excellent insight. I noticed you changed your call spread from the 840/850 to the 830/840. What was your reason for changing? Also, since the RUT appears to be rallying, how will you select your put spread? I think I know the answer, but I'd like to probe your mind. Thanks"

rrvball said: "Oops, I see the answer to my second question. You'll look for $1.00 premium on your put spread. That brings another question about fills. I notice that the spread on these options is typically .20 - .30 which means you are down .40 - .60 on each spread immediately after execution. Are you able to get better fills than that or do you factor that slippage into your plan? Basically, how do you place your orders to minimize slippage? I read some others typically place their orders in the middle of the spread and wait a few minutes and if it doesn't execute, change the order to basically a market order. I haven't had much luck with that with stock options. Does that work for the SPX or RUT options? Thanks"

holzie said: "[QUOTE=Handy Chandra]Dear Holzie, Your detail explanation for iron condor is VERY GREAT. Appreciated very much !!!! Would you also explain, how to do the adjustment credit vertical spread on stock. What's the point to roll up or down ? Is the +1 or -1 standard deviation ? On your IC using 10 unit spread from the sold leg as baseline for rolling up/down (adjustment). Thanks in advance. Best regards,[/QUOTE] [QUOTE]Would you also explain, how to do the adjustment credit vertical spread on stock.[/QUOTE] Basically the same way, however making adjustments on stock, on the majority of them, is next to impossible because of the strikes. Take PG for example. First, you have to trade huge amount of contracts to get any meaningful income, then if it goes against you, where are you gonna roll? It's too far apart so your adjustment would hardly yield any new credit. That's why other strategies, such as calendar spreads, are better for stocks. Lastly, I avoid stocks because you never know what can go wrong, then you have earnings, dividends, and early exercise to deal with. I like European style indexes with cash settlement for iron condors. [QUOTE]What's the point to roll up or down ?[/QUOTE] The point is to maintain a winning chance of making money at the end of the month. Rolls as adjustments cost some profits but they allow you to be away from the fire. Example, SPX is at 1438 and you are short the Feb or March 1445 calls. You know that SPX already knocked out 1441 once 2 weeks ago. It's 18 days till expiration, would you want to sit there with 7 points to break your legs and pray or would you want to take action, pay up a little and "roll" into the 1455 or 1460 shorts? As I mentioned before, you would roll the puts as well to take some profits off the table and re-sell for new premium on the puts as well to partially offset the increased cost of your upward roll. [QUOTE] Is the +1 or -1 standard deviation ? [/QUOTE] I was a little bit confused by that question but I think I know what you meant. You are referring to this: -1 RUT March07 830 call + 1 RUT March07 840 call -------------------------------- This means that I sold the 830 call and bought the 840 call. [QUOTE]On your IC using 10 unit spread from the sold leg as baseline for rolling up/down (adjustment). [/QUOTE] Again, slightly confused about your question but I will try. On the SPX you can go 5pt or 10pt strikes. The difference will be mainly in margin requirement. 5pt = $500 and 10pt = $1000. As far as determining how far to roll, I am flexible. Depending on time left and how far the market has run without a pull back. If less time is left, I will roll only 10 points, especially if it means making a new "all time" high for the index. This is why I mentioned that I want to adjust 10 points before I am hit at the short call strike but if 1445 is my adjustment point, and I have 30 days left, I want to see the index at least close at that mark, not just "hit it". There is a lot of speculators out there and they will buy into the hype, pushing the index high intraday but they will take their money off the table before close, waiting for a pulback....it's kinda the feeling in the market right now anyways. Hope it helped. Holzie. PS. Dumaman, clean up your damn Inbox :)"

thezster said: "I don't visit the options forum much because your language is total greek to me.... (some of you have tried to enlighten me... but I'm just to old for new tricks, I guess)... I do want to say, as a longstanding member of this board, that I'm absolutely thrilled to see the consistent, thought provoking posts in this section over the past couple of months or so..... This forum has never, ever been as active as it is now.... and ya'll are a credit to our group..... (even if you do speak a foreign language).... Kudos to you all!! Z"

holzie said: "[QUOTE=rrvball]Oops, I see the answer to my second question. You'll look for $1.00 premium on your put spread. That brings another question about fills. I notice that the spread on these options is typically .20 - .30 which means you are down .40 - .60 on each spread immediately after execution. Are you able to get better fills than that or do you factor that slippage into your plan? Basically, how do you place your orders to minimize slippage? I read some others typically place their orders in the middle of the spread and wait a few minutes and if it doesn't execute, change the order to basically a market order. I haven't had much luck with that with stock options. Does that work for the SPX or RUT options? Thanks[/QUOTE] Yeah, very good point. But remember that you are getting filled at a specific time at a specific price of the underlying, so I buy at the MARK (middle between bid/ask) and sell at the MARK, this way you pass the "shaft" on the other guy. You just can't collect every penny, or worry about where you should have put in the order...should you have waited a few points higher etc. If you get the basics right, some slippage or intraday movement shouldn't bother you. Getting filled at the "mark" is difficult on the SPX, easier on the RUT. Stocks that are thinly traded are difficult as well. The only way to prevent slippage is to timing the entry with legging. I will give you an example. I have a March RUT. I am full position on the 830/840 calls sold at 1.90 (currently at 2.80 = 0.90 paper loss). I am about 1/3 into the puts. RUT has been going up so I am not getting in yet. However, when RUT knocked out almost 804 today and I was home for lunch, I bought some 740 puts @3.20, which was trading at 5.60 at the open. Now, RUT pulled back I think 3 points from where I bought it, and I just need it to dip -2 points tomorrow to sell the 750 puts against it @5.00. So my credit would be 5.00-3.20 = 1.80 per contract, which I could only get around 1.10-1.20 for it if sold together. But the only reason I did it this way was because RUT was at all time high and the puts at all time low. So I bought the put for very cheap and sell the other puts against it when RUT does some profit taking on the way down. This can very well not work out if RUT just decides to climb tomorow, which is why I only did this with 1/3rd of my total planned put spread position. My final third will be placed by Friday close. Now, let me say something about the current 0.90 per contract loss on the call spread. Yes, I could be walking around and saying I could have waited 2 days and sell it not for 1.90 but 2.80, right? But I am not. I did it right in my mind. I sold in thirds and averaged 1.90, so I was selling calls on the way up like I was supposed to. My position is looking very good in my mind. My concern right now is a good position in the put spread so I can start watching the ENTIRE condor for larger market swings. Another long post. Sorry. Holzie."

holzie said: "[QUOTE=thezster]I don't visit the options forum much because your language is total greek to me.... (some of you have tried to enlighten me... but I'm just to old for new tricks, I guess)... I do want to say, as a longstanding member of this board, that I'm absolutely thrilled to see the consistent, thought provoking posts in this section over the past couple of months or so..... This forum has never, ever been as active as it is now.... and ya'll are a credit to our group..... (even if you do speak a foreign language).... Kudos to you all!! Z[/QUOTE] Thanks Z, you should visit more often. Options are fast moving, that means a lot of posts and lots of learning :) Holzie."

bklambco said: "Hi Holzie boy you sure got busy here on the forum, I'll have to read and re-read your posts here some really good usefull infor laid out here. Anyway everything worked out just as you explained on the TOS platform, account should open next week sometime, still fudging around with the software learning the platform practicing puting in orders setting up charts etc. I will be looking for some trades too, anyway thanks again for pointing me toward TOS it is an awesome piece of software wow, folks at TOS are great too. :th_dblthumb2:"

rrvball said: "Holzie, This is some interesting education. RUT has not pulled back. What's your strategy for the PUT spread? You had already bought the 740, are you selling the 750 and then with the other 1/3 selling say the 770/760 spread?"

thezster said: "[QUOTE=holzie]Thanks Z, you should visit more often. Options are fast moving, that means a lot of posts and lots of learning :) Holzie.[/QUOTE] I really and truly agree with you - think I could probably pick up a buck or two playin this game.... trouble is.... I don't "learn" by reading.... but rather need somebody to hold my hand for a few hours (drink a few beers) and explain in detail, all the "stuff" you guys are talking about.... I know it can't be as difficult as it sounds.... I'm not stupid.... but guess I find it easier to simply spend a few $$ and buy my stocks outright..... Somethin about teachin an old dog new tricks......"

holzie said: "[QUOTE=bklambco]Hi Holzie boy you sure got busy here on the forum, I'll have to read and re-read your posts here some really good usefull infor laid out here. Anyway everything worked out just as you explained on the TOS platform, account should open next week sometime, still fudging around with the software learning the platform practicing puting in orders setting up charts etc. I will be looking for some trades too, anyway thanks again for pointing me toward TOS it is an awesome piece of software wow, folks at TOS are great too. :th_dblthumb2:[/QUOTE] Glad I could help. Make sure that if you can't figure something out on the TOS platform, you watch the instructional videos -- they will show you exactly what you can do and hot to do it. But I am certain that without a doubt you will find the TOS platform the strongest retail options platform out there. They also constantly work on it and updates with new features are coming almost monthly now. Basically if you ask them for something, their programmers will try to incorporate it. I told you that on the personal level, these guys are awesome. The best experience I have had was when you cal their number, you can either go place a trade, or option 2 - talk to someone about a trade and that someone fricken knows options like the back of their hand. Their not scarred to tell you what they think would be good for your trade. When I was with OX, those guys are like robots -- no opinion, no insight -- just what do you want to place..... Stick around and you will find out that TOS is more like a community than just a plain options broker. So, they got you the commission right away without problems, right? Did you speak to Scott Sheridan? Holz."

holzie said: "[QUOTE=rrvball]Holzie, This is some interesting education. RUT has not pulled back. What's your strategy for the PUT spread? You had already bought the 740, are you selling the 750 and then with the other 1/3 selling say the 770/760 spread?[/QUOTE] You're right, the market kept going up past 2 days and that's ok. Remember, you MUST not care where the market is going and how fast. You don't have an opinion, you just have "options". You can structure anything you want with them. Sometimes, you have to accept a short term minimal loss, to avoid any remote possibility of a larger loss or max loss. But ok, this is what I did today and why (over the phone....which makes my trades less efficient but....) The 740 Put I bought for 3.20, wanting to sell the 750 against it at "better" price than the average spread was yielding...sold for 2.25 (loss 0.95). I knew the danger of legging into a spread....and I accepted that it didn't work out. But because it was Friday I had to be in some put spread to offset the potential, but unlikely, threat of RUT inching higher next week. This is the put trade I did today: -1 RUT MAR07 770 PUT +1 RUT MAR07 760 PUT ------------------------ CREDIT: 1.20 So my IC is now, +1 MAR07 840 CALL -1 MAR07 830 CALL -1 RUT MAR07 770 PUT +1 RUT MAR07 760 PUT --------------------------- CREDIT: 1.90 + 1.20 = 3.10 Let the games begin. You are asking what I will do if RUT keeps going higher. I will do exactly what I said I would do. When/if RUT hits 820, I am rolling the 830 short call into the 840 short and the 770 puts into a 780 put. I will not fight the market, no matter how irrational I think the "rally" might be. Remember, that the higher the market goes without any slight correction, the wilder the correction will be when it happens, and it always happens. I believe the trend will still continue but RUT fell from 801 to 787 last mont it corrected, it might fall from 817 to 802....who knows.....When that happens the deltas of the highly priced calls I had to roll into at a loss will drop like a potato and I will recoup that loss or make money. The expiration is still 5 long weeks away and I have up to 4 weeks to make the most out of it. Ok, a few comments on my experiences with RUT. Overall, I don't like it. The only thing I like is the superb executions, I mean I am getting marks within minutes. However, RUT doesn't subscribe well to the overall market, it is kinda it's own animal with it's own mind. I don't like it. I've said before that I do not want to predict the market movement, but I saw SPX down 5 points and RUT up 7 points at the same time. I always liked the SPX because it is THE MARKET..like a trained German Shephard..but RUT is comparable to a spoiled poorly potty trained poodle. And I have still been watching the yields on the SPX...and they are NOT that different. Another thing I do not especially like are the volatility changes within RUT. There is always a +/1 IV change that moves the prices differently than my calculations so I may make a correction I set out to do weeks ago but the prices will be off. So overall, I think after we finish this month with RUT, I will go back to my old pal SPX. I will add some more comments over the weekend. Holzie."

holzie said: "[QUOTE=thezster]I really and truly agree with you - think I could probably pick up a buck or two playin this game.... trouble is.... I don't "learn" by reading.... but rather need somebody to hold my hand for a few hours (drink a few beers) and explain in detail, all the "stuff" you guys are talking about.... I know it can't be as difficult as it sounds.... I'm not stupid.... but guess I find it easier to simply spend a few $$ and buy my stocks outright..... Somethin about teachin an old dog new tricks......[/QUOTE] Good point....but I think you could still spice up your returns with some simple, win-win strats like selling covered calls on stocks you tend to hold around 30 days in general. Just my 2 cents :) Holz."

bklambco said: "Yeah talked to Scott via email, said the rates will be setup on the platform once the account gets funded, not problem at all thanks again. I have watched all the demos and half the Analyzer still finishing up. [QUOTE=So, they got you the commission right away without problems, right? Did you speak to Scott Sheridan?[/QUOTE] [QUOTE=holzie]Glad I could help. Make sure that if you can't figure something out on the TOS platform, you watch the instructional videos -- they will show you exactly what you can do and hot to do it. But I am certain that without a doubt you will find the TOS platform the strongest retail options platform out there. They also constantly work on it and updates with new features are coming almost monthly now. Basically if you ask them for something, their programmers will try to incorporate it. I told you that on the personal level, these guys are awesome. The best experience I have had was when you cal their number, you can either go place a trade, or option 2 - talk to someone about a trade and that someone fricken knows options like the back of their hand. Their not scarred to tell you what they think would be good for your trade. When I was with OX, those guys are like robots -- no opinion, no insight -- just what do you want to place..... Stick around and you will find out that TOS is more like a community than just a plain options broker. So, they got you the commission right away without problems, right? Did you speak to Scott Sheridan? Holz.[/QUOTE]"

holzie said: "Good man, glad to hear that. You'll love it. Just make sure that you take your time with the platform. I still don't know it 100% because of all the features. People complain that it is "difficult" but then you ask them if they used the instructional videos and they say "no". It's pretty powerful software for the retail trader. I was told several times that it is very very close to what they used on the floor when they used to be at the pits. I really wouldn't mind having access to OptionVue Pro but it's 2 grand......"

bklambco said: "Ha ha... SPX = Trained German shepard... RUT = Untraind Poodle.... Thats the RUT I know, it goes up and down in Gaps. According to my charts it has hit my extreme 3rd bolinger band, when that happens it always goes back to the center. For RUT I use a 34 EMA For SPX I use 21 ema these numbers are Fibonanci numbers. I use 3 bollinger bands on a daily chart first one I set up with 34 ema then -0 +0 deviation this defines the center resistance point or the price the that it comes back to on a good couple up day or down days. Next a 34 ema and a -1 +1 this builds the next level of lines out from the -0 +0 Next a 34 ema and -2 +2 Last a 34 ema -3 +3 You will notice the price almost always will stop below or on top at these lines. Most of the time when they get to the -2 +2 they will go back to the -0 +0 and repeat the process. Rarely do they ever go to the +3 -3 line and when they do they is big reversal back to the -0 +0 line or slightly below it. It has hit the -3 +3 on friday [QUOTE=holzie]You're right, the market kept going up past 2 days and that's ok. Remember, you MUST not care where the market is going and how fast. You don't have an opinion, you just have "options". You can structure anything you want with them. Sometimes, you have to accept a short term minimal loss, to avoid any remote possibility of a larger loss or max loss. But ok, this is what I did today and why (over the phone....which makes my trades less efficient but....) The 740 Put I bought for 3.20, wanting to sell the 750 against it at "better" price than the average spread was yielding...sold for 2.25 (loss 0.95). I knew the danger of legging into a spread....and I accepted that it didn't work out. But because it was Friday I had to be in some put spread to offset the potential, but unlikely, threat of RUT inching higher next week. This is the put trade I did today: -1 RUT MAR07 770 PUT +1 RUT MAR07 760 PUT ------------------------ CREDIT: 1.20 So my IC is now, +1 MAR07 840 CALL -1 MAR07 830 CALL -1 RUT MAR07 770 PUT +1 RUT MAR07 760 PUT --------------------------- CREDIT: 1.90 + 1.20 = 3.10 Let the games begin. You are asking what I will do if RUT keeps going higher. I will do exactly what I said I would do. When/if RUT hits 820, I am rolling the 830 short call into the 840 short and the 770 puts into a 780 put. I will not fight the market, no matter how irrational I think the "rally" might be. Remember, that the higher the market goes without any slight correction, the wilder the correction will be when it happens, and it always happens. I believe the trend will still continue but RUT fell from 801 to 787 last mont it corrected, it might fall from 817 to 802....who knows.....When that happens the deltas of the highly priced calls I had to roll into at a loss will drop like a potato and I will recoup that loss or make money. The expiration is still 5 long weeks away and I have up to 4 weeks to make the most out of it. Ok, a few comments on my experiences with RUT. Overall, I don't like it. The only thing I like is the superb executions, I mean I am getting marks within minutes. However, RUT doesn't subscribe well to the overall market, it is kinda it's own animal with it's own mind. I don't like it. I've said before that I do not want to predict the market movement, but I saw SPX down 5 points and RUT up 7 points at the same time. I always liked the SPX because it is THE MARKET..like a trained German Shephard..but RUT is comparable to a spoiled poorly potty trained poodle. And I have still been watching the yields on the SPX...and they are NOT that different. Another thing I do not especially like are the volatility changes within RUT. There is always a +/1 IV change that moves the prices differently than my calculations so I may make a correction I set out to do weeks ago but the prices will be off. So overall, I think after we finish this month with RUT, I will go back to my old pal SPX. I will add some more comments over the weekend. Holzie.[/QUOTE]"

bklambco said: "Looks like he took a loss today, was in the money on RUT 810/820 Was going to stick it out for a recede but chickened out. You can read up for since it is educational, bought more puts to offset the loss. [url]http://www.elitetrader.com/vb/showthread.php?threadid=49586&perpage=6&pagenumber=2158[/url]"

bklambco said: "On my paper trading fake account set executed these trades today to get some experience with TOS and its features. Verticle credit spread STO GG 40 Feb07 call -6.40 BTO GG 45 Feb07 call 1.88 credit -4.52 Current underlying price of GG is 27.40 so by Feb 16th if it does not go to 40.00 its a good trade. Found it with the spreadhacker tool on TOS. The numbers and stuff said it was a 100% chance of being profitable blah blah so I thought I would play with and see how it turns out. GG=Gold Corp. Iron condor STO SPX FEB07 1470 CALL -1.25 BTO SPX FEB07 1480 CALL .35 credit -.90 STO SPX FEB07 1415 PUT -1.25 BTO SPX FEB07 1405 PUT .68 credit -.57 total condor credit 1.47 Total credit 4.52 +1.47 = 5.99 x 100 $599 per contract. Will see where we go."

rrvball said: "Something definitely seems out of whack with that GG spread. I'm guessing the underlying is not GG alone. You might want to check it out. I couldn't find those options on optionsxpress by putting in GG as the stock symbol. But, when I entered, GKYBH, it showed as a 40 call and it only showed GG as the underlying. But if you look at the other options on GG, the 32.50 is bid 0 and ask 0.10. [QUOTE=bklambco]On my paper trading fake account set executed these trades today to get some experience with TOS and its features. Verticle credit spread STO GG 40 Feb07 call -6.40 BTO GG 45 Feb07 call 1.88 credit -4.52 Current underlying price of GG is 27.40 so by Feb 16th if it does not go to 40.00 its a good trade. Found it with the spreadhacker tool on TOS. The numbers and stuff said it was a 100% chance of being profitable blah blah so I thought I would play with and see how it turns out. GG=Gold Corp. Iron condor STO SPX FEB07 1470 CALL -1.25 BTO SPX FEB07 1480 CALL .35 credit -.90 STO SPX FEB07 1415 PUT -1.25 BTO SPX FEB07 1405 PUT .68 credit -.57 total condor credit 1.47 Total credit 4.52 +1.47 = 5.99 x 100 $599 per contract. Will see where we go.[/QUOTE]"

bklambco said: "Glad you brought that up, I could not beleive it was for real, but it is. I am on TOS and the trade is on as stated. Look at Yahoo link for the options [url]http://finance.yahoo.com/q/op?s=GG[/url], credit is even higher today stock is up just a bit. Still trying to figure out if it is a scam, where someone is going to come in and pump the thing right past 40 in the next couple days, it is just my fake account for now so no harm playing with it. TOS has a spread scanner called SpreadHacker that is how I found it. It may be your OX does not carry this underlying enity. It is canadian company listed in US on nyse with $19b market cap. [QUOTE=rrvball]Something definitely seems out of whack with that GG spread. I'm guessing the underlying is not GG alone. You might want to check it out. I couldn't find those options on optionsxpress by putting in GG as the stock symbol. But, when I entered, GKYBH, it showed as a 40 call and it only showed GG as the underlying. But if you look at the other options on GG, the 32.50 is bid 0 and ask 0.10.[/QUOTE]"

rrvball said: "Well, if you look at the options on yahoo, there are some starting with GKY and some starting with GG. And for some strikes there are both. For example, the 30 strike has GGBF with bid = 0.05 and GKYBF with bid = 17.50. So, that tells me that the GKY options are most likely a special option, probably before a spinoff or split that includes either another underlying stock or more than 100 shares of GG. Ok, I called my broker and after about 15 minutes, he finally found out what the GKY options contracts represent. After searching on the CBOE website, you can find that there was a merger that affected these options ([URL="http://search.cboe.com/cgi-bin/MsmGo.exe?grab_id=0&page_id=28769&query=gg&hiword=gg%20"]see here[/URL]) Basically, if you look at the bottom of that document, you'll see that each contract now represents 169 shares of the underlying, but it's priced as if it's only 100 shares. It's kind of complicated, but basically, you have to multiply the GG stock price by 1.69 to see what the GKY underlying is worth. So, if GG is at $28, GKY is at 28 * 1.69 = 47.32, and the GKYBH 40 call is in the money by 47.32 - 40 = 7.32 and the GKYBI 45 call is in the money by 2.32. So, if my thinking is correct, you sold a spread that was in the money and will make money on it if the GKY is below 44.52 (40 call + premium received of 4.52) which means GG has to be below $44.52 / 1.69 = $26.34. [QUOTE=bklambco]Glad you brought that up, I could not beleive it was for real, but it is. I am on TOS and the trade is on as stated. Look at Yahoo link for the options [url]http://finance.yahoo.com/q/op?s=GG[/url], credit is even higher today stock is up just a bit. Still trying to figure out if it is a scam, where someone is going to come in and pump the thing right past 40 in the next couple days, it is just my fake account for now so no harm playing with it. TOS has a spread scanner called SpreadHacker that is how I found it. It may be your OX does not carry this underlying enity. It is canadian company listed in US on nyse with $19b market cap.[/QUOTE]"

holzie said: "Good job guys. You gotta watch for that. When I first saw that I knew something wasn't right :) SpreadHacker @ TOS is really a great tool to give you a GENERAL idea of what trades are out there, how to structure them etc. However, you should only use them as a guide or learning tool. It's computer generated based on algorithms...so when it finds a spread with probability of 99%, it might actually be a suicidal one...same goes for calendars..etc. It usually has to do a lot with changes in IV, which the software picks up and assembles a trade. The software doesn't know though that there is an FDA approval exected tomorrow, or earnings. Do what you know. You can start with their basic suggestion and bring it to the Analyze tab and tweak it to something that resembles reality. I am glad that you are playing around with the platform, because I am telling you right now that 50% of my success is in that platform AND my (now yours as well) commission structure. Holz."

bklambco said: "Thanks for checking that out, so it is a scam already not scam that I thought would happen later, I guess its two scams since it is also in the money. I did see the 169/100 it did not mean anything to me. I only looked at the stock price and bid and ask looked like a great deal. TOS tool had it flashing as the sure thing. Gotta watch for the contract specification not being the typical 100. So what would you do with the thing since i have it on anyway. It aint real money so got any clever ideas how to get out of it?"

holzie said: "[QUOTE=bklambco]Thanks for checking that out, so it is a scam already not scam that I thought would happen later, I guess its two scams since it is also in the money. I did see the 169/100 it did not mean anything to me. I only looked at the stock price and bid and ask looked like a great deal. TOS tool had it flashing as the sure thing. Gotta watch for the contract specification not being the typical 100. So what would you do with the thing since i have it on anyway. It aint real money so got any clever ideas how to get out of it?[/QUOTE] Yeah, buy it back at a loss and move on. If you have it on until expiration than you will be hit with max loss. Holzie."

bklambco said: "Platform question? I had already put it in at a 4.50 debit before this post I dont think it will eat that today. Now I want to adjust it, do cancel replace the order if so will I be charged commison? Can I adjust it in real time without be charged or cancel replace? I'll try and figure it out but hopefully someone with TOS background will let me know. [QUOTE=holzie]Yeah, buy it back at a loss and move on. If you have it on until expiration than you will be hit with max loss. Holzie.[/QUOTE]"

holzie said: "[QUOTE=bklambco]Platform question? I had already put it in at a 4.50 debit before this post I dont think it will eat that today. Now I want to adjust it, do cancel replace the order if so will I be charged commison? Can I adjust it in real time without be charged or cancel replace? I'll try and figure it out but hopefully someone with TOS background will let me know.[/QUOTE] Yes, you just right click the order in "Working Orders" tab and do "Cancel/Replace". Then simply increase the debit to what the market wants to get out. YOU ARE NOT CHARGED COMMISSION ON CANCELS OR REPLACEMENT ORDERS -- ONLY ON ACTUAL FILLS. Sometimes, I have 10 or 20 replacements in one day, on days I take a day off and can trade, like today. Let me know how it went. What credit you got initially and at what debit you bought it back so we can calculate the loss and learn from the trade. Holzie."

bklambco said: "Great thanks got out Initial trade On my paper trading fake account set executed these trades today to get some experience with TOS and its features. Verticle credit spread STO GG 40 Feb07 call -6.40 BTO GG 45 Feb07 call 1.88 credit -4.52 Current underlying price of GG is 27.40 so by Feb 16th if it does not go to 40.00 its a good trade. Found it with the spreadhacker tool on TOS. The numbers and stuff said it was a 100% chance of being profitable blah blah so I thought I would play with and see how it turns out. GG=Gold Corp. Got out at one contract at 4.90 and another at 4.95 debit. [QUOTE=holzie]Yes, you just right click the order in "Working Orders" tab and do "Cancel/Replace". Then simply increase the debit to what the market wants to get out. YOU ARE NOT CHARGED COMMISSION ON CANCELS OR REPLACEMENT ORDERS -- ONLY ON ACTUAL FILLS. Sometimes, I have 10 or 20 replacements in one day, on days I take a day off and can trade, like today. Let me know how it went. What credit you got initially and at what debit you bought it back so we can calculate the loss and learn from the trade. Holzie.[/QUOTE]"

bklambco said: "Prior entry... STO SPX FEB07 1415 PUT -1.25 BTO SPX FEB07 1405 PUT .68 credit -.57 One of these contracts were bought back at .08 debit. I had put in a gtc to buy back at .10 Goto watch the quantity on the platform, I put the order back in to buy back the remaining contract at .10 gtc."

holzie said: "[QUOTE=bklambco]Great thanks got out Initial trade On my paper trading fake account set executed these trades today to get some experience with TOS and its features. Verticle credit spread STO GG 40 Feb07 call -6.40 BTO GG 45 Feb07 call 1.88 credit -4.52 Current underlying price of GG is 27.40 so by Feb 16th if it does not go to 40.00 its a good trade. Found it with the spreadhacker tool on TOS. The numbers and stuff said it was a 100% chance of being profitable blah blah so I thought I would play with and see how it turns out. GG=Gold Corp. Got out at one contract at 4.90 and another at 4.95 debit.[/QUOTE] OK, so the middle is 4.925 debit vs. 4.52 credit = loss 0.405. That was a very clever way to get out of a very bad trade. Holz."

holzie said: "[QUOTE=bklambco]Prior entry... STO SPX FEB07 1415 PUT -1.25 BTO SPX FEB07 1405 PUT .68 credit -.57 One of these contracts were bought back at .08 debit. I had put in a gtc to buy back at .10 Goto watch the quantity on the platform, I put the order back in to buy back the remaining contract at .10 gtc.[/QUOTE] Hehe, nice, so you are learning to buy it back early :) Can you see the advantage of this by now? You cut your risk by FULL 1 week and only gave up 0.08 (8 cents) in exchange for that. This is all about risk/reward and since ICs stink in risk/reward (but still fare better than single vertical credit spreads) you gotta manage the risk tightly. I miss the SPX, my friend. RUT is really overhyped amongst spread traders. The extra 5% volatility is really not worth the extra pennies in premium when you consider that these midcaps and small caps are mostly pumped and dumped---so easily. RUT is falling today, which is good for me as it was getting close to my 820 adjustment point.....but I saw it coming, I just didn't know on what day :) RUT makes me nervous because it's hard to follow with any fundamentals behind it. I can't wait until I get out of it and back into SPX......this experience really made me appreciate the time tested SPX. Holz."

bklambco said: "Thanks Holz... I went ahead and adjusted the rest of the spx to get out at .05 debit, since time decay will eat up this weekend, I hear if you get out at .05 debit on TOS they dont charge commisions, so that was just an added incentive. I will adjust next week if needed. 05-15 cents. I follow Everything on Charts not much on fundamentals, except for the Big Events Reports, Payroll, Fomc etc, still even then the market goes back to its trend that it was in before the one day event, the event has to be really bad to derail the trend. Currently I see RUT will stop at about 803 that is next bolinger band down as I outlined in a prior post. I use a 34 ema as the center bolinger band and 3 on each side of it. It had been on the upside of bolinger 2 all this week just today fell below it and could not break back above so I see it falling to bolinger 1 which is at about 803 and possible rebound up. the center is at about 790-792, if it goes all the way back to there get ready for a rebound. If it breaks below this and stays down possible start of a downtrend? [QUOTE=holzie]Hehe, nice, so you are learning to buy it back early :) Can you see the advantage of this by now? You cut your risk by FULL 1 week and only gave up 0.08 (8 cents) in exchange for that. This is all about risk/reward and since ICs stink in risk/reward (but still fare better than single vertical credit spreads) you gotta manage the risk tightly. I miss the SPX, my friend. RUT is really overhyped amongst spread traders. The extra 5% volatility is really not worth the extra pennies in premium when you consider that these midcaps and small caps are mostly pumped and dumped---so easily. RUT is falling today, which is good for me as it was getting close to my 820 adjustment point.....but I saw it coming, I just didn't know on what day :) RUT makes me nervous because it's hard to follow with any fundamentals behind it. I can't wait until I get out of it and back into SPX......this experience really made me appreciate the time tested SPX. Holz.[/QUOTE]"

holzie said: "[QUOTE]I hear if you get out at .05 debit on TOS they dont charge commisions, so that was just an added incentive.[/QUOTE] That is correct my friend"

bklambco said: "Oh well here goes almost the last of it. Prior orders as entered. STO SPX FEB07 1470 CALL -1.25 BTO SPX FEB07 1480 CALL .35 credit -.90 BTC for .13 debit just now. It is a good down day today, the price has hit the 21 ema on the daily chart that is where heavy rebounds happen so, my feeling is monday might be an up day, feeling is better take it while the going is good. So I have one spx left that I screwed up learning TOS, should have got it out for .08 it is now at a 1.05 while it was at .08 just a couple hours ago before the down draft. Instead of putting in for 2 contracts I put in for one that got out at .o8, see prior post."

bklambco said: "RUT has hit 803 the first bollinger band just like I thought and has started to rebound look at a 15 min chart. RUT is one F*#2ed up little poodle. It should have gone to the center 34 ema like the rest of them OEX and SPX. OH well has to be different right! SPX has hit 21 ema which is the center on my bollinger and has started a small rebound look at 15 min."

holzie said: "[QUOTE=bklambco]Oh well here goes almost the last of it. Prior orders as entered. STO SPX FEB07 1470 CALL -1.25 BTO SPX FEB07 1480 CALL .35 credit -.90 BTC for .13 debit just now. It is a good down day today, the price has hit the 21 ema on the daily chart that is where heavy rebounds happen so, my feeling is monday might be an up day, feeling is better take it while the going is good. So I have one spx left that I screwed up learning TOS, should have got it out for .08 it is now at a 1.05 while it was at .08 just a couple hours ago before the down draft. Instead of putting in for 2 contracts I put in for one that got out at .o8, see prior post.[/QUOTE] [QUOTE]RUT has hit 803 the first bollinger band just like I thought and has started to rebound look at a 15 min chart. RUT is one F*#2ed up little poodle. It should have gone to the center 34 ema like the rest of them OEX and SPX. OH well has to be different right! SPX has hit 21 ema which is the center on my bollinger and has started a small rebound look at 15 min. Reply With Quote[/QUOTE] That's alright, you only have a limited position on the Feb SPX with the 1415 put being short. Like you said, the time decay has no mercy on the options and you got 2 free days of theta this weekend. Starting Monday, it's 4 days till expiration. It would have to be a real doomsday scenario to get that low on the SPX. You are looking on a 1.5 standard deviation move on Monday, or 2 standard deviation move on Tuesday...Wednesday doesn't even come to play with probability. If you can watch it all day, get out early at or below 0.20, otherwise buy it back at 0.05 or let it expire, depends on you. Yeah RUT had another day of being stupid...what a surprise. However, the pullback cushioned my position very nicely so I can have a quiet weekend. Holzie."

bklambco said: "When you get a chance can you explain 1.5 standard deviation. I've seen it calculated on another platform where do you see it on TOS, I think I saw it in analyzer shown graphically as time periods, not sure. In analyzer was trying to graph my Iron condor to show the /--\ (picture) to show where the prices for the cal and put need to be to be profitable, how do you show this? Dont have to do this right now just take your time, I might figure it out this week end when I finish taking the video. [QUOTE=holzie]That's alright, you only have a limited position on the Feb SPX with the 1415 put being short. Like you said, the time decay has no mercy on the options and you got 2 free days of theta this weekend. Starting Monday, it's 4 days till expiration. It would have to be a real doomsday scenario to get that low on the SPX. You are looking on a 1.5 standard deviation move on Monday, or 2 standard deviation move on Tuesday...Wednesday doesn't even come to play with probability. If you can watch it all day, get out early at or below 0.20, otherwise buy it back at 0.05 or let it expire, depends on you. Yeah RUT had another day of being stupid...what a surprise. However, the pullback cushioned my position very nicely so I can have a quiet weekend. Holzie.[/QUOTE]"

bklambco said: "Never mind I figured it out on Analyzer, took the video :) [QUOTE=bklambco]When you get a chance can you explain 1.5 standard deviation. I've seen it calculated on another platform where do you see it on TOS, I think I saw it in analyzer shown graphically as time periods, not sure. In analyzer was trying to graph my Iron condor to show the /--\ (picture) to show where the prices for the cal and put need to be to be profitable, how do you show this? Dont have to do this right now just take your time, I might figure it out this week end when I finish taking the video.[/QUOTE]"

holzie said: "[QUOTE=bklambco]Never mind I figured it out on Analyzer, took the video :)[/QUOTE] Told ya :)"

bklambco said: "[QUOTE=holzie]Told ya :)[/QUOTE] Gost town here. How's the RUT trade going, still in it? All my Feb07 postions are pretty much gone, on fake account. I had bought some more Feb Puts credit spreads in the 1400 range and below just before the up serge started yesterday. Got at a price range of about .35 and have bought them back for .3 - .5 cents. I tried to get a put position on my live account Mar07 1350/1340 put at .50 -.75 but no bites, tried 2 days all day. I was able to get it on my fake account at mar07 1345/1335 put @ .52. Today tried all day to get into mar07 1490/1500 call at 1.15-1.50, canceled out and tried to get mar07 1500/1510 at .55 - .80, not bites. After market closed got TOS on support chat and said "No Fills?" he said just a minute, "Filled". I can tell you the fills at IB are very fast and they fill even higher than what I put in for, they try to get the best fills for you. Platform is nothing close to TOS. So pros and cons of TOS/IB someday I will have two accounts always good idea to have a backup account some where. So I have one live trade at credit spread. Mar07 1500/1510 call at .75 My exit plan is 1490 exit The trade is 3 std deviations away from strike. Will look for a Put on a down day when ever that day comes and try to buy back at the call at .10-.20 early asap. I'm hoping that by going at 1500 I wont have to watch it so close since have some things comming up that will take time away. Big Ben B was speaking today these upserges last a day or two then something else comes along. Any comments are welcome good and bad, I like to learn."

holzie said: "Sorry about the ghost town. Yes, I am still in the same RUT iron condor. Today we hit the 30 day till expiration mark so we are entering the true money making phase. The past 2 weeks was more of a holding period as my entry was pretty clumsy. I am a little worried about the downside. At this point I am not going to worry about the upside at all. The markets are pacing way too high without correction and I don't like the VIX. I noticed the huge increase of the VIX March 18 strike calls, which means that I am not the only one that is a little worried. I am not looking forward to the ride down. 3 weeks ago, I was thinking more in terms of a 2-4% correction, but today it looks like a 3-7% correction to me. I am of course no expert but you don;t have to be one at this point...just look at the VIX chart for 1-2-3 years and you will see what I am talking about. Other than that, you saw my intent to acquire some shares of MRVL through puts. Right now it looks like I am gonna come out empty handed, no stock, but I am still getting paid 20% for waiting for it. I also have a nice calendar spread going with PG.....so overall my March portfolio is looking good -- high thetas AND positive deltas in case this madness continues. It will be tough entering the April put spread on the SPX without any significant March correction, which is why I will wait longer this time to enter it. It will have to be on a big down day and I still would like to be 80-100 points away on the short put. So that's it. Holzie."

holzie said: "[QUOTE]Today tried all day to get into mar07 1490/1500 call at 1.15-1.50, canceled out and tried to get mar07 1500/1510 at .55 - .80, not bites. After market closed got TOS on support chat and said "No Fills?" he said just a minute, "Filled". I can tell you the fills at IB are very fast and they fill even higher than what I put in for, they try to get the best fills for you. Platform is nothing close to TOS. So pros and cons of TOS/IB someday I will have two accounts always good idea to have a backup account some where.[/QUOTE] Well, we can't have it all, can we :) The SPX is a proprietary product traded only on the CBOE, that makes it tougher. But you know to call the TOS trade desk next time you think you should have been filled -- done it many times myself and they make it happen. My fills are generally better, not on the SPX of course, than what I ask for and I ask for MARK, nothing less. I don't know IB, I only know Optionsxpress and TOS, and both have same good fills to me. Holzie."

bklambco said: "Agree gotta watch the down side, Its geting up there in the clouds now, last time it was this high was during the dot.com boom in 2000 time frame. I used a Fibonanci Retracement tool yesterday starting at the July06 low to yesterday price, It shows the first support level to fall to will be 1400 or below that is the 23% retracement the next support leverl is 1360 or below that is the 38% retracement level so I was trying to get puts below that and the premium was ok at the time. So next time I will try again, we should get a down day in a couple days since it is now over bought, then who knows. I hope you are able to buy back that rut on a good down day. [QUOTE=holzie]Sorry about the ghost town. Yes, I am still in the same RUT iron condor. Today we hit the 30 day till expiration mark so we are entering the true money making phase. The past 2 weeks was more of a holding period as my entry was pretty clumsy. I am a little worried about the downside. At this point I am not going to worry about the upside at all. The markets are pacing way too high without correction and I don't like the VIX. I noticed the huge increase of the VIX March 18 strike calls, which means that I am not the only one that is a little worried. I am not looking forward to the ride down. 3 weeks ago, I was thinking more in terms of a 2-4% correction, but today it looks like a 3-7% correction to me. I am of course no expert but you don;t have to be one at this point...just look at the VIX chart for 1-2-3 years and you will see what I am talking about. Other than that, you saw my intent to acquire some shares of MRVL through puts. Right now it looks like I am gonna come out empty handed, no stock, but I am still getting paid 20% for waiting for it. I also have a nice calendar spread going with PG.....so overall my March portfolio is looking good -- high thetas AND positive deltas in case this madness continues. It will be tough entering the April put spread on the SPX without any significant March correction, which is why I will wait longer this time to enter it. It will have to be on a big down day and I still would like to be 80-100 points away on the short put. So that's it. Holzie.[/QUOTE]"

holzie said: "RUT is stalling and time decay is really starting to take a bite. Tomorrow, will be a heavy down day for both SPX and RUT -- you watch it, I said it :)"

rrvball said: "[QUOTE=holzie]RUT is stalling and time decay is really starting to take a bite. Tomorrow, will be a heavy down day for both SPX and RUT -- you watch it, I said it :)[/QUOTE] Hey Holzie, do you ever think about buying back the sold leg of your PUT spread, e.g. the 770 PUT? It seems like you could buy it back and then resell it when/if the RUT moves down. I guess the downside would be if the RUT continues to move up, your bought PUT and your CALL spread both become worth less and less. Maybe this is where you say, "I don't try to guess which direction the market will go. I just follow it." Or, maybe, this is time to sell the ATM butterfly? Let's see: 800 CALL 22.20/22.70 (sell 1 @ 22.20) 810 CALL 15.50/15.90 (buy 2 @ 15.90 = 31.80) 820 CALL 9.90/10.20 (sell 1 @ 9.90) so total debit = 31.80 - 22.20 - 9.90 = 0.30 and would leave you with: long 1 760 PUT short 1 770 PUT short 1 800 CALL long 2 810 CALLs short 1 820 CALL short 1 830 CALL long 1 840 CALL all for a net credit of 3.10 - .30 = 2.80 And doing the profit/loss curve on those set of options shows me that all you did was expose yourself to more risk. Before adding the butterfly, you will lose if RUT finishes below 770 - 3.10 = 766.90 or if RUT finishes above 830 + 3.10 = 833.10. Now with the added butterfly, you will lose if RUT is below 770 - 2.80 = 767.20 or if RUT is above 830 + 2.80 = 832.80 or if RUT is between 802.80 and 817.20. Of course this is all without commissions factored in. Did I do that correctly?"

holzie said: "No I wouldn't do that in this environment. There is enough risk in the market as it is. We are all expecting a correction but at the same time the market direction seems to be preserved.....so it's a lot of confusion. I really think that the 770 - 830 range is correct one for March and I will not adjust at 820 this time because there will be a quick reversal and I don't want to spend the extra capital. RUT is at 818 right now, it might go to 823 next week but it will go back to 810-820, unless all hell breaks loose. Holzie."

rrvball said: "When would you do it? You mentioned it being insurance, but my calculations don't show it as being insurance for anything. Did I miss something in my calculations?"

holzie said: "Alright.. an update: Today I did the following trade: +1 RUT Mar07 770 Put -1 RUT Mar07 760 Put (number of contracts is irrelevant as usual) -------------------------- Debit: 0.35 Basically I bought back my put spread and booked profit of 1.20 - 0.35 = 0.85 per contract. Tomorrow, I have limit order to sell: -1 RUT Mar07 790 Put +1 RUT Mar07 780 Put (number of contracts irrelevant) -------------------------- Credit: 1.00 (currently 0.75 but I expect a pull back tomorrow so I might get the fill) So what am I doing here? What's your plan, Holz? I am refusing to roll up my short 830 call eventhough RUT is at 826.11. I am simply not convinced and I do not want to do any premature move yet. It's 23 days till expiration and the probability of touching is always higher than probability of expiring. Right now, the strike has not been touched. With RUT at "all time high", God I hate when CNBC says that, it is more probable RUT will consolidate than keep pacing to another high especially when the earning season for the BIG market is coming to an end. But here is another reason I did not roll. It's the VIX. I said that the VIX last week saw a huge increase in contracts in the 18 and 20 call strikes. VIX trades inverse of the market under normal circumstances, meaning when the market is going up, VIX (volatility) is going down. However, today, again, the market was UP and the VIX was UP as well, that means that the big guys are not convinced. I have a few solutions lined up for either scenario so whatever I do will resemble more of an action than a reaction. I am not gonna pretend though I am all fine and dandy here. Obviously, I would rather see RUT at 810 than 826...if shit hits the fan real bad I will be slightly over break even for this month. I don't like it but beats the hell out of a loss. Holz."

bklambco said: "Very good plan Holz...Like the way you pull in the puts and rollup and sell for more credit, cuts down the potential loss. Lets hope Rut comes to its senses soon. A stressfull day for you today?, was watching it today and thinking about ya. Its over extended according my charts. [QUOTE=holzie]Alright.. an update: Today I did the following trade: +1 RUT Mar07 770 Put -1 RUT Mar07 760 Put (number of contracts is irrelevant as usual) -------------------------- Debit: 0.35 Basically I bought back my put spread and booked profit of 1.20 - 0.35 = 0.85 per contract. Tomorrow, I have limit order to sell: -1 RUT Mar07 790 Put +1 RUT Mar07 780 Put (number of contracts irrelevant) -------------------------- Credit: 1.00 (currently 0.75 but I expect a pull back tomorrow so I might get the fill) So what am I doing here? What's your plan, Holz? I am refusing to roll up my short 830 call eventhough RUT is at 826.11. I am simply not convinced and I do not want to do any premature move yet. It's 23 days till expiration and the probability of touching is always higher than probability of expiring. Right now, the strike has not been touched. With RUT at "all time high", God I hate when CNBC says that, it is more probable RUT will consolidate than keep pacing to another high especially when the earning season for the BIG market is coming to an end. But here is another reason I did not roll. It's the VIX. I said that the VIX last week saw a huge increase in contracts in the 18 and 20 call strikes. VIX trades inverse of the market under normal circumstances, meaning when the market is going up, VIX (volatility) is going down. However, today, again, the market was UP and the VIX was UP as well, that means that the big guys are not convinced. I have a few solutions lined up for either scenario so whatever I do will resemble more of an action than a reaction. I am not gonna pretend though I am all fine and dandy here. Obviously, I would rather see RUT at 810 than 826...if shit hits the fan real bad I will be slightly over break even for this month. I don't like it but beats the hell out of a loss. Holz.[/QUOTE]"

drdan said: "I always hate it when this happens. A good strong resistance or support is broken. If you follow your rules when you first start a trade you have no problem - mine would be to close the Call Spread, because it broke resistance. You should never guess the market. I agree it is overextended we are due for a pullback but that does not mean it is going to happen. I will be watching for you Holz. Your risk may pay off because it does look like we should be pulling back, but remember now 820 is support since that was the resistance point before today."

holzie said: "[QUOTE=bklambco]Very good plan Holz...Like the way you pull in the puts and rollup and sell for more credit, cuts down the potential loss. Lets hope Rut comes to its senses soon. A stressfull day for you today?, was watching it today and thinking about ya. Its over extended according my charts.[/QUOTE] Well, I thought so, trying to pull in enough money in case I was wrong about the VIX, in which case I would have to pay up a little to roll up the calls. Really the right way would be to do the roll at the same time (puts and calls) for future reference. That fricken RUT is just wacky. The standard deviations do not work here, they just don't apply, period. I think "overextended" is a mild word, my friend. Severly overbought perhaps? Will keep you posted how I wiggle it. Holz."

holzie said: "[QUOTE=drdan]I always hate it when this happens. A good strong resistance or support is broken. If you follow your rules when you first start a trade you have no problem - mine would be to close the Call Spread, because it broke resistance. You should never guess the market. I agree it is overextended we are due for a pullback but that does not mean it is going to happen. I will be watching for you Holz. Your risk may pay off because it does look like we should be pulling back, but remember now 820 is support since that was the resistance point before today.[/QUOTE] Yep, that's why you have heard me say so many times that I don't believe in support or resistance, they really don't mean much. Closing the call spread is not my first choice. Rather rolling up from 830 short to the 850 short for roughly 60% of the cost. I know I shouldn't guess the market, you know me, I always say that I have no opinion but I just can't ignore the VIX. As I said, it should trade in opposite direction and not the same direction. This means that one "bad" news and people will loose their cool big time. I hate these "investors"..they do it to themselves. There is nothing wrong with an upward trending market, but this is very close to a frenzy. Did you see the report? Margins are at ALL time high, which only means that a 5% correction will really be double of that. I am willing to observe for the remainder of this week and take advantage of the free theta over the weekend. After that, it will be all about moving for the final position. It will take a lot of playing around with the TOS software but I am pretty sure I can walk away with some money. The key here will be to be set for the final 2 weeks before gamma will start killing me. Gamma means limited choices and I won't let it get to that obviously. I tell you one thing, after this you gotta love the SPX. You know my SPX paper trade for this month is doing great and it was selected based on the same damn criteria as the RUT. This makes me think about the RUT. If things can go uncontrolled on the upside with the RUT, I really don't want to be in the downside fury of it..I bet it can fall 30-40 points on an ugly day. When I tried the RUT for the first time this month I really thought that I can use all the experience from trading SPX during rough times but hell no. The pricing is different as well. It fluctuates too much, and deviates from theoretical values by dull 25% or more. The RUT is SOOO much more work than the SPX it's incredible comparing it. I will take bad executions with the SPX over RUT any day from now :) That's my thoughts for the day. Holz."

holzie said: "Alright, RUT is just not letting go. I still be watching Thursday and/or Friday for signs of change of direction. I am freeing up some positions early (those with unrealized profit) to generate emergency cash for the final wiggle -- rolling the 830 strike to 850 strike. If I do this, I will actually incur a loss for the month in the amountof 0.25 per contract if I don't do anything else after the wiggle. If you don't know what I am talking about, it's $25 loss per thousand at risk or 2.5% loss. But I would rather take a upfront minimal loss than sweating bullets for 3 weeks. I was watching SPX all day with envy today. What a beauty....if the market is down, dammit stay down :) .. unlike RUT, which just finishes up. I hope all of you are taking notes and comparing my SPX trades with this first RUT trade. You can see that the amount of work involved with RUT vs. SPX. DrDan, rightly said that he would have been adjusting at 820...I do 10 points with the SPX but RUT, seemed to me, is half the size, which means a 5 point adjustment...we're clearly at that point. I haven't done it yet because I didn't want to get whipsawed on both the calls and puts at the same time with what I saw in the VIX. Alright let's watch what tomorrow brings. Holz."

JCast3 said: "Holz, check pm when you have a minute...."

holzie said: "[QUOTE=JCast3]Holz, check pm when you have a minute....[/QUOTE] Word..........."

holzie said: "Ok, made the final maneuver. I rolled the 830/840 call to 850/860 call. This is the trade as entered: CONDOR(roll up 20 points): +3 RUT MAR07 830 CALL -3 RUT MAR07 840 CALL -3 RUT MAR07 850 CALL +3 RUT MAR07 860 CALL -------------------------- DEBIT: 3.30 Alright, I will do 2 things. First calculation will be based upon the main trading that I did with all equal size contracts and I will exclude the stupid smaller loss when I tried to leg in put by put. Total credits - Total debits = Profit at expiration 4.11 - 3.65 = 0.46 per contract or 4.6% per capital used. If I take into consideration that stupid transaction than it would be only 0.26 or 2.6%. Since this was a wild month full of trading, commission took a decent bite out of that as well so to be safe, I would declare that if RUT stays between 800 - 850 I will break even. I consider this a pretty decent save, considering that statistically-wise I had a almost certain chance of loosing the full ($1000 - credit received) x number of contracts. We still have to wait till expiration of course, nothing is for sure, but this is a pretty nice looking position right here. When this is over, I will go back to my old friend the SPX, and stick with what I know....I obviously don't handle RUT very well. My paper trade on SPX with shorts at 1400 and 1495 has not been needing a single adjustment whatsoever and it was selected on the same statistical probability as RUT. So, if we break even, we will only be up around 22% for the year. Honestly, it could have been worse. One more thing. Why did I not wait untill Monday to possibly adjust, taking advantage of the time decay over the weekend? Simple answer is that I don't trust RUT and I saw a decent down day and took it, which gives me a really nice and calm weekend :) Holz. PS. The final position therefore is 790/800 puts and 850/860 calls."

bklambco said: "Fantastic move Holz...Perfect Risk Management play, thats all that matters survive for another day. Now I guess you can sleep better till the next time anyway. Was trying to buy a put on spx but seems the MM are taking no bites, guess I need to put out better bait. I think it has to do with Vix being so low. Take care. [QUOTE=holzie]Ok, made the final maneuver. I rolled the 830/840 call to 850/860 call. This is the trade as entered: CONDOR(roll up 20 points): +3 RUT MAR07 830 CALL -3 RUT MAR07 840 CALL -3 RUT MAR07 850 CALL +3 RUT MAR07 860 CALL -------------------------- DEBIT: 3.30 Alright, I will do 2 things. First calculation will be based upon the main trading that I did with all equal size contracts and I will exclude the stupid smaller loss when I tried to leg in put by put. Total credits - Total debits = Profit at expiration 4.11 - 3.65 = 0.46 per contract or 4.6% per capital used. If I take into consideration that stupid transaction than it would be only 0.26 or 2.6%. Since this was a wild month full of trading, commission took a decent bite out of that as well so to be safe, I would declare that if RUT stays between 800 - 850 I will break even. I consider this a pretty decent save, considering that statistically-wise I had a almost certain chance of loosing the full ($1000 - credit received) x number of contracts. We still have to wait till expiration of course, nothing is for sure, but this is a pretty nice looking position right here. When this is over, I will go back to my old friend the SPX, and stick with what I know....I obviously don't handle RUT very well. My paper trade on SPX with shorts at 1400 and 1495 has not been needing a single adjustment whatsoever and it was selected on the same statistical probability as RUT. So, if we break even, we will only be up around 22% for the year. Honestly, it could have been worse. One more thing. Why did I not wait untill Monday to possibly adjust, taking advantage of the time decay over the weekend? Simple answer is that I don't trust RUT and I saw a decent down day and took it, which gives me a really nice and calm weekend :) Holz. PS. The final position therefore is 790/800 puts and 850/860 calls.[/QUOTE]"

holzie said: "Hey, did you mean buying a single put on the SPX? I did it with RUT and the index didn't cooperate and I lost 0.90, which I consider low and lucky because RUT is 20 points higher now and the put would be worthless. The best way to do these is just enter the damn thing at once, give the MM 0.05*4 reserve. If you are a little greedier, nothing wrong with that, enter the IC as 2 spreads on up or down days. About that RUT adjustment, I am not thrilled but I am content with the way I handled it. I could have done a fly to roll to 840/850 instead of a condor (different from iron condor) for less money, but I just don't click with the index. and I want this thing to be over. If anything, this is a good example of why you must leave sufficient cash in your account for a possible adjustment, because if you overextend your account and tie up the money, you are stuck. Imagine if I didn't have the 3.30 * number of contracts to do the roll up...I would still be short the 830 call today. I really don't want to throw the perception that RUT is bad or no good. It's just like any other index, really...it's just not my cup of tea. One positive thing I have to say about the RUT and this adjustment is that the electronic fills are really good. Also, on average I always get a little better fill than I expect on the credit side...(like an extra 0.01 or 0.02), which almost pays for the commissions. Next month, or after March expiration, I will really have to think about entering a put spread on the SPX. The credits are pretty low as it is for the puts, which doesn't make it worth the risk in case of a possible correction. Even if you go down 5% on the puts from the current level, you realize that you could only do the being short 1380 puts, which yields around 0.20-0.30 -- hardly worth the risk. So I just might do only a bear call spread until we get some sense into the market. Lastly, you made an excellent point with the risk management....you're right, I am more likely to live another trading day. You have to look at it from a perspective. You will have loosers -- turning a looser into a tiny looser or breakeven is always nice. My return for 2007 is 22%, which means that if I break even every time for the rest of the year, I wold still outperform the SP500 or SPX by a longshot. Holzie."

bklambco said: "[QUOTE=holzie]Hey, did you mean buying a single put on the SPX? [/QUOTE] No a credit spread anything below 1370 just waitng for a bigger down day, friday was down but not enough and I dont think it is done going down. When it gets to about 1340 or near the 20 ema we might see more premium. I have the 1500/1510 credit call that I got for .75 I tried to buy that back for .25 and contacted TOS via live chat and they contacted the floor but not biting they came back for .35, it was at .25 for awhile but they would not take it. I was looking at the commitment of traders report Friday and it looks like the big boys commercial players have more puts out than calls, the retail players or speculators have more calls out than puts. If the market starts to turn down hill then I must would like to be on the call credit spread side and ride it down rather than the put side. Therefore I am not crazy about getting that Put unless the strikes are low and out of harms way. Have you traded OEX or XEO? I am thinking there might be ok premium there, I have traded it but I can not remember how it behaves, simular to SPX? Again great job on the adjustments, Go down RUT, down RUT!"

bklambco said: "Typo...meant When it gets to about [U]1340 [/U]or near the 20 ema we might see more premium. 1340 should have read '1440 or more like 1444' Now that it is past that will have to see if we really have a market reversal. I would only want to buy call credit spreads at this time provided you can find premium. Perhaps just Buy a spy put. I see a resting place or pause at around 1400 or little below. [QUOTE=bklambco]No a credit spread anything below 1370 just waitng for a bigger down day, friday was down but not enough and I dont think it is done going down. When it gets to about 1340 or near the 20 ema we might see more premium. I have the 1500/1510 credit call that I got for .75 I tried to buy that back for .25 and contacted TOS via live chat and they contacted the floor but not biting they came back for .35, it was at .25 for awhile but they would not take it. I was looking at the commitment of traders report Friday and it looks like the big boys commercial players have more puts out than calls, the retail players or speculators have more calls out than puts. If the market starts to turn down hill then I must would like to be on the call credit spread side and ride it down rather than the put side. Therefore I am not crazy about getting that Put unless the strikes are low and out of harms way. Have you traded OEX or XEO? I am thinking there might be ok premium there, I have traded it but I can not remember how it behaves, simular to SPX? Again great job on the adjustments, Go down RUT, down RUT![/QUOTE]"

JCast3 said: "i hope you guys didnt get creamed on the put sides of your IC's....the spreads were ridiculous today.... i set up a papertrade yesterday while waiting for my new account to fund at TOS for a March SPX condor....my "first" condor got smoked on the first day of trading....:laugh: i guess i could have adjusted it earlier in the day for a much smaller loss, but i just let it run to see what ultimate meltdown would look like....my put side strikes were 1415 (-5) and 1405 (+5), and the market ran through both of them like a drunk guy through a red light at 2am.... that shit would suck if it was real....i'll bet a lot of people got hurt today...."

bklambco said: "My positions were.... credit spread. Mar07 1500/1510 call at .75 My exit plan is 1490 exit The trade is 3 std deviations away from strike. Will look for a Put on a down day when ever that day comes and try to buy back at the call at .10-.20 early asap. I'm hoping that by going at 1500 I wont have to watch it so close since have some things comming up that will take time away. Today I bought it back for .10 so I am flat right now nothing on. I want to buy more call credit spreads or direct spy puts any ideas? Do not want to jump in front of the Bear with a Put credit spread at this time, very hard at this time to tell where it's gonna stop, have to let the dust setttle. For those who took a hit today I hope you were able to survive at least, this is the Black Swan day I guess. On my way to work in a parking lot I was watching 10 black crows fight over food with two white seagulls, I guess the crows won today. I even had my 401k funds locked up in a MoneyMarket account waiting for this day. If it turns out to be the turning point I hope to get some good deals later on after we hit bottom. [QUOTE=JCast3]i hope you guys didnt get creamed on the put sides of your IC's....the spreads were ridiculous today.... i set up a papertrade yesterday while waiting for my new account to fund at TOS for a March SPX condor....my "first" condor got smoked on the first day of trading....:laugh: i guess i could have adjusted it earlier in the day for a much smaller loss, but i just let it run to see what ultimate meltdown would look like....my put side strikes were 1415 (-5) and 1405 (+5), and the market ran through both of them like a drunk guy through a red light at 2am.... that shit would suck if it was real....i'll bet a lot of people got hurt today....[/QUOTE]"

holzie said: "Alright, days like today mean for every options trader earning the badge of honor -- IF he survives the blood bath and lives to trade another day. Today hit me hard, I was at work, unable to do much -- pretty much was trading and adjusting blindfolded. My shorts yesterday: 800 puts / 850 calls After I realized that the SP500 was down 50 points and RUT 30 points, I knew that I was in trouble because I adjusted my original condor (original shorts 780P/830C) So I knew, that anything I was gonna do at the point of my put short being almost 10 points in the money was to start pulling in as much credit as possible to minimize max loss. Buying back my put position would cost too much too close to my max loss minus all credits received this month for RUT. So I decided not to panic with the short 800 puts -- it was too late, and any rolling or closing would cost too much money. Instead I decided to to ASSUME the max loss but pull in as much credit as possible. So I took off the 850/860 for 0.30 debit and sold the 820/830 call spread for 2.00 credit. With current credits my max loss is around 50% of my original risk. Because I traded half my account, this means 25% of my portfolio. I will be waiting if there is another wild drop, trailing the RUT with call spreads by 30 points or closer as it gets closer to expiration. My goal is to do one more such roll if RUT drops to 770-775 and it would be from the 820 short call to 800 short cal...so I would be short both the 800 put and 800 call, which is a 100% guarantee of a max loss, but if I was able to do this one more roll down with the calls, my loss would decrease from 50% to 20-30%. Bottom line, I would survive this with flying colors, given the circumstances. There is no should have done this, or should have waited etc etc..it's too late for that. Another point I would like to make. I have heard a lot of crap about how bad iron condors are because supposedly their risk reward is 7:1 in favor of risk and one bad month can wipe you out for the whole year. That's just bologny. Even if I sit on my ass until expiration I would be down maximum of 2 months worth of my standard profit -- no year worth, no 3 year worth...nothing. A day like this one actually made me believe that ICs are an incredible long term strategy even if you have to take a loss every now and then. I may be down for the year but I will be still heavily up YTD -- obviously next month I will only be lightly skimming the call spreads on the SPX...I will not got into the puts. Last thing, I was posting about the VIX call buying activity in the 18-20 strike last week -- and where is the VIX today --- 18.31 -- up from 12.10. So I will trust the VIX next time that's for sure :) I am really having a blast trading this month. It started out with me complaining about how much work it is to manage the RUT but it turned into a IC dissertation for me :) I feel sorry for folks that always believed that iron condors are best left alone right now. Most of these guys are gonna take the max loss or close to it :("

holzie said: "By the way I am not trying to toot my own horn by previous post...I am just happy it it has turned out this way, because it could have been sooooo much worse, so much worse."

drdan said: "Holz, Couldn't you have closed the short put and let the long put ride? I realize it was very expensive today especially with the bid and ask prices so spread. With a crash like this that is the reason for a credit spread to protect yourself if things go terribly wrong, by closing the short and letting the long ride. Now I do think your trading satrategy from here to the end of expiration is a sound one. The RUT now below 800, this will be an extremely strong resistance point. Get as much credit as you can!!!"

holzie said: "[QUOTE=drdan]Holz, Couldn't you have closed the short put and let the long put ride? I realize it was very expensive today especially with the bid and ask prices so spread. With a crash like this that is the reason for a credit spread to protect yourself if things go terribly wrong, by closing the short and letting the long ride. Now I do think your trading satrategy from here to the end of expiration is a sound one. The RUT now below 800, this will be an extremely strong resistance point. Get as much credit as you can!!![/QUOTE] Nah, Dan, I see what you are saying but by the time I was able to do anything the puts were almost 2 grand (yes, $2,000) a piece plus I would be risking a chance of a reversal and be out of a whole shitload more money. It crossed my mind though. I believe spreads should be traded together, unless you know how to read tarot cards :) My truly only option is to play the volatility at this point.....unless RUT jumps above 800, the spread will be more expensive to close now than me keeping all the credits and taking the max loss. As we know max loss = margin - credits received, so it will be cheaper pulling in more credit. If I end up 800 short call and 800 short put, I will essentially will be in a debit butterfly. As awkward as it sounds, might actually break even with the max loss in the following scenario, If RUT drops another 10 points I will be able to buy back the 820/830 call spread for 0.50 debit (roughly) and if there is an uptick the same day 5-10 after that, I should be able to sell the 800/810 call spread for around 3.00 credit (currently 3.65), which would put me into a butterfly position. This butterfly will actually be profitable between 794 - 806, which I am not counting on by the way, but the max loss from this fly is 30% of margin -- adding up the credits, I already got more than 30% of the margin in credits from previous adjustments.........soooo it's not looking that bad. I tell ya, without the TOS software I would be lost, more than likely I would loose most of my money. But with the software, I can simulate different adjustments and see how it all plays out together. This is why OptionsXpress can't touch these guys...all I would see is red :) Thanks for the comment, I was wondering about your opinion. Holz."

roarflolo said: "I just thought I'd share my experience from yesterday. I'm currently paper-trading using the TOS software, I had two IC's on and it didn't look pretty. This is what I did to manage the positions: NDX [LIST] [*]NDX 1750/1775/1900/1925 for 5.85 credit [*]When the NDX hit 1785 I bought back the put side for 8.20 debit [*]I was looking at a 5.82-8.20 = 2.38 loss [*]Today I put on a new IC 1675/1700/1850/1875 for 5.00 credit [*]If this position goes to expiration I'll end up with 5.82-8.20+5.00 = 2.62 credit[/LIST] SPX [LIST] [*]SPX 1405/1420/1485/1500 for 3.25 credit [*]When the SPX hit 1422 I bought back the put side for 4.25 debit [*]I was looking at a 3.25-4.25 = 1.00 loss [*]Today I put on a new IC 1350/1365/1455/1470 for 2.72 credit [*]If this position goes to expiration I'll end up with 3.25-4.25+2.72 = 1.72 credit[/LIST] I still have the call-sides of both the original IC's and I plan to let them expire. I am using a lot more margin than I expected when I got the original positions which shows how important it is to keep buying power reserves for adjustments. RF"

holzie said: "Excellent adjustments, RF. Let's hope it will hold :) I think it will, actually."

holzie said: "Alright, the bottom did not seem to fall out this morning and the volatility dropped so all credit spreads made a lot of money overnight. So, I booked some overnight profits from the call spread I put on yeasterday: --> bought back 820/830 call spread for 1.45 debit (0.55 profit). RUT, seems to hold the 790 really good but I am not sure if it holds, but at the same time, I am not sure if RUT does not shoot up suddenly 20 points. So for both scenarios, I felt like I had to have another call spread overnight, just in case tomorrow we have another big down day. So I sold the 830/840 call spread for 0.65. This will serve 2 purposes: 1) it will establish my upward zone which I will want to let expire if RUT is stabilized, and 2) If RUT drops again I will be able to scalp another 0.40-0.50 before before rolling downward again. I also have a standing order to roll the 800/790 put spread into the 780/770 spread for 1.60 debit (currently 2.00 debit). So, with a bit of luck and RUT up 5-10 points from here, I should be able to have the following position till expiration 770/780/830/840, with 780 and 830 being the shorts. If this works out, I will be breakeven on the adjustments plus all the premium I "booked" in the meantime, so I have a decent chance come out with a good profit. So hopefully, that roll on the puts will work out tomorrow. Holz."

holzie said: "Before I go to work I have about 30-40 mins of trading before I come home for lunch. My quick plan for tpday's carnage is to buy back the call spread I sold yesterday for around 0.10-0.20, I am not picky because I want to immediately slide into the fly, meaning selling another call spread at 800/810, this would give me a hybrid fly 790/800/800/810. It should pull in around 3.00 - 3.50 credit and also decrease my risk by 1/3 because it will negate 1 short at 800 level. More to come in the afternoon, where I will say what I did for the day."

bklambco said: "My plans are I have some small direct buys on puts to go right along with the carnage. Very small amounts on SPX 1220 and SPY 125 bought orders for both at debit .15 will close out when if premium goes up. [QUOTE=holzie]Before I go to work I have about 30-40 mins of trading before I come home for lunch. My quick plan for tpday's carnage is to buy back the call spread I sold yesterday for around 0.10-0.20, I am not picky because I want to immediately slide into the fly, meaning selling another call spread at 800/810, this would give me a hybrid fly 790/800/800/810. It should pull in around 3.00 - 3.50 credit and also decrease my risk by 1/3 because it will negate 1 short at 800 level. More to come in the afternoon, where I will say what I did for the day.[/QUOTE]"

bklambco said: "Plans below just got blown out at open of the gate, premium shot way up no chance of getting on, and I am not going to chase it. Just going to watch it fall. [QUOTE=bklambco]My plans are I have some small direct buys on puts to go right along with the carnage. Very small amounts on SPX 1220 and SPY 125 bought orders for both at debit .15 will close out when if premium goes up.[/QUOTE]"

holzie said: "Smart move, the volatility shot it up in price that's why ..and the delta didn't help.... Still trying to close the call spread and then I will put on a standing order to sell the other call spread on a bounce. The trades are premium driven."

holzie said: "Ok, did some pretty much zero sum effect trades today, which means no progress. I am off tomorrow so I will be able to trade all day. I will post the summary tomorrow night to avoid confusion. Just remember, this is not how I usually trade iron condors :) This is too much work! This is what I am thinking currently. I am thinking about keeping all the money I scalped this month on volatility and just roll out the March options into April07 for more stability. This should be very cheap -- no more than 0.50 debit. This way, I would have to put up with the RUT but I would not have a loss by any means this month..but actually pretty decent booked profits. Will let you know what I decide. In booked profits I am up 18% for the month but of course I am down on paper.....so why not roll the paper loss to battle another month before Gamma kills any correcting efforts next week."

JCast3 said: "[QUOTE=holzie]Will let you know what I decide. In booked profits I am up 18% for the month but of course I am down on paper.....so why not roll the paper loss to battle another month before Gamma kills any correcting efforts next week.[/QUOTE] that sounded like a good plan....just be careful with the put sides of your trades, i really dont think we've seen the end of this yet, and next week could have a day just as bad as tuesday...."

holzie said: "Alright, tried to wiggle, booked some money, but overall this close to expiration and with IV so high, it didn't bring as much credit as I would have liked. Finally entered into a final loss position for final credit, bringing my loss to 60%, and my 2007 return to -38%. It's not great but thank God I was consistent with the sizes of my trades, which means that YTD I am UP 71% including this loss. The final position has the same loss profile today as it will have in expiration: March07 RUT 790/790/800/800. Next spread will be a bear call spread only on the SPX, after March 16th. I will try to limit the length of exposure to the market. There will be no bull put spreads until I can figure out where the market is going. As you know, I don't believe in support and resistance, they don't mean anything as the market proved in the last 2 weeks. All those folks who thought that support was at 1430, then 1410, then 1400, then 1380....they were all broken because of fear, which is exactly my point. The only resistance I can see is 1500 as a psychological barrier, and 12000 support on the DOW because of the same reasons -- hardly enough to put my money on it. I believe that for the next 2 months it will be a good opportunity to play those call spreads pretty far out though -- they will still pay you :) The volatility shot up the premiums on both sides but it also means that 50 points out will hardly do. Holz."

rrvball said: "Holzie, forgive my ignorance, but what does your final position [QUOTE=holzie]March07 RUT 790/790/800/800. [/QUOTE]mean? Is that [INDENT]long 1 790 Put short 1 800 Put short 1 790 Call long 1 800 Call[/INDENT] ???"

holzie said: "Yes, this position means that it has the same profit/loss from the time I entered it to expiration no matter what the market does. Basically I locked in the loss between now and expiration. It was an economic decision, any additional repair strategies would just cost additional money, extending my loss, and none of the repair strategies would give me a high probability of success -- so I would in effect be gambling. To bring the position into a winning status would require more capital than my current locked loss. Hope it helps."

holzie said: "Getting ready for the "adjustment" in my account -- ouch :) As for April, the SPX call spreads are not to my liking right now. I want to be somewhere around 1460 on the short side but the credits are ridiculously low. The actual execution price would be even lower so I will be watching it. The name of the game for me is selling he delta of 7 (0.07) or 8, which for the RUT would be the 850 call. I am avoiding the put credit spreads, obviously, but I am selling a few naked puts for my favorite stocks to buy at MY desired levels. I think April will be a good month for Holzie :)"

JCast3 said: "well i finally got my new TOS account funded (took long enough :angry: )....now i have to figure out how to use their trading platform....ive been playing with it a bit since i opened the account (papermoney) and its definitely gonna take some getting use to.... not sure how im feeling about the spreads for next month on the spx....im def a noob at this type of options strategy, but for some reason, they dont look to appealing to me....we'll see what happens i guess...."

holzie said: "[QUOTE=JCast3]well i finally got my new TOS account funded (took long enough :angry: )....now i have to figure out how to use their trading platform....ive been playing with it a bit since i opened the account (papermoney) and its definitely gonna take some getting use to.... not sure how im feeling about the spreads for next month on the spx....im def a noob at this type of options strategy, but for some reason, they dont look to appealing to me....we'll see what happens i guess....[/QUOTE] Welcome aboard TOS. You will learn the platform in no time, I promise you. I got so used to it, it became primitive -- lmao but I don't know how to trade without it - you will see how quickly you find using some of the platform features absolutely essential. As far as the April SPX goes...you are right, there is no rush. I would avoid the puts for anther month at least but the calls seem too compressed compared to the premiums in the puts. You really do not want to be no less than 60 points away/30 day period in the SPX on the calls..or 7-8 delta, which is the 1470 short call right now. The 1470/1480 goes for 0.60 right now."