MamaCash 8:05 am on Tuesday, January 22, 2019
Tags: MarketTide ( 11 ), SPX1dte ( 1,714 )

SPX 1dte

#spx1dte Sold SPX Jan23 2600/2595 put credit spread (pcs) @ .25 x 6, four in one account and two in the other. Looking for an opportunity to sell a call credit spread (ccs)
Sold SPX Jan23 2685/2690 ccs @ .20 x6 to complete ICs in both accounts based on break below low of day.

Jeff 8:24 am on Tuesday, January 22, 2019

what was your signal to sell?
- MamaCash 8:34 am on Tuesday, January 22, 2019
  
  Tide signal on 5 min and 30 min along with a breakthrough on the MACD trend line on the 5 min chart. Signals a little weak today so may regret but the short side is almost at 2sd.
  - Jeff 9:00 am on Tuesday, January 22, 2019
    
    sorry. Maybe I shouldn’t have asked.
    - MamaCash 9:11 am on Tuesday, January 22, 2019
      
      🙂 Gotta learn to defend or can’t do these.
      - Jeff 9:13 am on Tuesday, January 22, 2019
        
        For #MarketTide, do you use /ES or SPY or both?
        
        MamaCash 9:16 am on Tuesday, January 22, 2019
        
        Both but only /ES for SPX trades.
        
        MamaCash 9:18 am on Tuesday, January 22, 2019
        
        The best defense from what I see is to turn the credit spread that is being challenged into a fly (limit to tiny loss) or bwb to reverse and make some directional profit.
        
        Jeff 10:10 am on Tuesday, January 22, 2019
        
        I’ve realized that if I had BOUGHT these condors every day instead of selling them, I’d have a huge profit. You’d have to put up with several small losses and wait for the fairly big wins. And you’d have to resist taking small profits on some days, to wait for bigger ones (which would mean some days small profits would disappear and you’d instead get full loss). Then, it would be best to leg out.
        
        Like today, I got out with a .25 loss. But had I purchased for .95 on Friday instead of sold for .95, I could right now bank a 5.00 profit (and growing as we drop).
        
        It’s something I’ve been thinking about in these volatile markets: a condor buying strategy when VIX is remaining stubbornly high.
        
        MamaCash 10:21 am on Tuesday, January 22, 2019
        
        Agree. IV was too low to be selling premium. Sometimes selling is the right thing to do but Friday nor early today was that time. Buying back half of my short puts my position quite profitable but then I converted it to a bwb to eliminate further risk.
Jeff 10:27 am on Tuesday, January 22, 2019

Good deal. I can make .80 – 1.00 several days on a row. Then take a breakeven or small loss. Overall, I think it is workable strategy, since days like today don’t gap, they drift, giving you chance to exit.

However, if I switched to a buying strategy from November, when I started doing this, I’d be highly profitable overall. It would have been a better route. The tricky part is knowing when to close. If I’d bought the condors for .95, I could have closed for a double early this morning. If I’d waited until now, I would have made 7x.

While I still like the selling strategy, I’m seriously thinking about switching until VIX drops. It’s just so antithetical to everything I’ve done with options since I started! Volatility is high, selling is obvious. But with these 1-dte, you can buy condors for pretty low risk.
- MamaCash 10:31 am on Tuesday, January 22, 2019
  
  Surprisingly enough, IV on the SPX was very low for this week both Fri and today. If you use IV as your guide, it will help to determine whether to buy or sell. I agree that buying 1dte for the last few would have been better. Buying back half of the shorts effectively reverses direction and gives you a directional position. But, as @hcgdavis says, it won’t always work.
  
  I changed defense tactics earlier and changed the put credit spread into a bwb. It cost me a little to resell the shorts but not much. The flies are a much better way to control risk.
  - Jeff 1:08 pm on Tuesday, January 22, 2019
    
    I looked back at my notes and saw that IV on SPXW expirations were between 20 and 33% every day in December. Today, even with us down 1.5%, it’s only 15%. This is why I was able to consistently get around 200 points between my short strikes AND get around 1.20 per day. Now, I can’t even get 100 apart or over 1.00.
    - MamaCash 1:13 pm on Tuesday, January 22, 2019
      
      Yes, IV has been slowly drifting lower. It’s hard to get enough credit to make it worth the trouble. I keep HV and IV together in a lower study on my SPX chart. Right now, HV is way higher than IV and the delta between them is unhealthy for long positions. I think you’re right. This is a time to buy, not sell, but who knows for how long?

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