[TinGull]

Also just got filled on a call vertical that I sold on SOLF for 40 cents, 17.6% return with 76% probability based on the vols.



It's a DEC and any close under the top of that range we've got will give me max profit. Note, too, IV is really pushing high. These folks report earnings on Tuesday and right now it's looking like "smart money" knows what those earnings are gonna be and they want to be poised for taking it lower. When the report is released and vol gets crushed even if earnings are good I won't get hit too hard with it. High odds setup here.

[TinGull]

Covered some positions today. Seeming how theres still 30 days left till DEC expiry and I get nearly my max profit...I'll take that. And actually....now that I look at my statement...I got out of that one at .02, NOT .04. Gotta love smart routing.

SOLF is working well, too.

[james_gsx]

I'm going to bump this ancient thread

Here is a chart of the SPY, obviously price has dropped substantially since this thread originated. Tin, what would you setup for a credit spread in this instance?

Maybe July 132/133 (but these are nearly worthless) and July 119/118 puts. Would that be on the right track?



Also Tin, do you know where on TOS (or anywhere) where I can get tutorials for using their software?
EDIT: NVM, figured that part out

[contactape]

Hello,

I've been testing this strategy last few weeks, on weeklys. Here are the rules I followed:
1. Must be an ETF (during testing phase)
2. High level of liquidity and preferably penny bid/ask spread.
3. Min credit 4%, max 10% - to limit risk.
4. Spread must of beyond near-term resistance level. The stronger the better.
5. Spread must be at least 5 strike prices away.
6. During testing phase, ticker price must be more than 100$. This is to get choices for every 1% change in

price. Gradually shift this limit to 50$.
7. Wrote a program to find the price move of the underlying beween ticker price that time of day and closing on

expiration for last 1 year. Out of 52 instances, max 3 or 4 instances should have resulted in loss. (Thinking is

- in those 3-4 instances, volatility would be so high that I would be able to go way way far OOTM to get other

criteria met, so they may not result in loss).
8. Never initiate a new position in last 2 days of expiration.

Only SPY met all these criteria. And with decent levels of volatility last month, this worked out well.

But this last week volatily crushed dramatically, forcing me to explore other avenues. So did two things:
1. Bought 22.5/24 June VIX call bull spread for debit.
2. Bought SPY, LVS, PCLN reverse IC (Debit) this Thursday for next Friday expiration.

Here's my thoughts on them, would appreciate inputs/comments/criticism:
1. High beta (yes, I am debating my tell on SPY - probably wouldn't repeat it)
2. Low VIX days. (Switch to selling Vertical spreads in moderate/high volatility days)
3. Opened those positions Thursday morning, may be should wait until Friday (to take initial fluctuations in

options prices off) or even Monday (to void weekend's theta decay).
4. Premium paid must NOT be more than (I am thinking) about 50%. I spent 58%, 59% and 64% - which look on higher

side. Any suggestions?
5. Need to look at charts and do some technical analysis to assess probability of high movement in underlying.
6. Check the program to see average price moves in last 52 months for this trade to be profitable statistically.
7. Actually, check how this could work in moderate/high volatility market. I suspect volatility would drive prices too high for this to have the trade enough juice left for profitability.

Did quite a bit of reasearch on this, aint' getting much. I'm reading Sheldon Natenburg, and the guy is just

great! Difficult with full time job though. If anyone has any suggestion /good presentation/video... on subject,

please do share.

Please do share your ideas on what other criteria should I consider in chosing reverse IC in this market. Or at least criticise to tell me where you think I am making mistake.

[jperl]

For those of you with full time jobs that want to trade the Iron Condor, check out

7minutetrader.com.

They do weekly spreads on the S&P 500 Index (SPX). For a $50/month they will tell you the weekly setup for a credit spread reward/risk ranging from 6% to 14%/week.
I use them for my non daytrading portfolio.