Upside Move In SPX This Week

J

JoeA

Member
How has everyone been managing this rally in terms of any ATM trades you might have on? Thankfully, the decision to RH on the close yesterday helped my position today, but it looks like a small upside loss will be unavoidable as I plan to exit my current trade before the long weekend. Did this move surprise anyone else after last Friday's selloff?

(This week felt like every week of 2017...)
 
I do fine, no major problems. Yesterday I entered some long delta trade with service I'm in. Wasn't convinced but didn't have any idea on my own. Trade is a big winner already, can be huge if we just sit here.
From what you said I assume you trade longer term put BWB. I don't consider that optimal strategy for today's marker especially if managed it by RH. Look at Rhino's style, maybe you like it better.
Just loose thoughts, I do not know what is your dte or where you have your structure at.
 
I'm working on an 11 DTE trade now, ATM-style, opened on Monday and held until Friday. Structure can be butterfly or condor. 4-7 DTE debit spread hedges the downside but adds upside risk, of course. In many ways it's very similar to @DGH's 'Boxcar Trade'.
 
ok. 11 dte is good. still, consider, value of RH. in 11 dte it is even more dangerous if done alone. If you are hedged somehow it is, I suppose, acceptable. Today's late drop must have been unpleasant anyway, I guess.
But, again, what you said earlier - one has to find his own style he is comfortable with.
 
According to Scott he was expecting the market to move up into the holiday so this may be a little late for your trade if you plan to exit today If you could hold it over the weekend or maybe roll it out you may get a pull back

Does the Baxcar trade still working ?
It seems that when Dan presented it back in May it was almost an ideal trade with the highest premium
I don't think you can get that kind of trade these days at least I can't seem to set it up the same way
I would have to go out further in DTE or set the structure away from ATM in which case you only get a tiny profit
 
status1 said:
According to Scott he was expecting the market to move up into the holiday so this may be a little late for your trade if you plan to exit today If you could hold it over the weekend or maybe roll it out you may get a pull back
Click to expand...

I actually got a bit of a P/L bump near the close and was able to exit the main structure flat-down (i.e. - a little worse than a scratch). Not too bad considering the S&P's were up ~130 points over the course of a short week with very few downticks, if any. Now I've just got the downside hedge on, which expires Monday afternoon and is already at max loss. No point in paying the fees to close it.

status1 said:
Does the Baxcar trade still working ?
It seems that when Dan presented it back in May it was almost an ideal trade with the highest premium
I don't think you can get that kind of trade these days at least I can't seem to set it up the same way
I would have to go out further in DTE or set the structure away from ATM in which case you only get a tiny profit
Click to expand...

I'm not sure how the Boxcar Trade (per Dan's guidelines) is doing these days. The VIX has come in quite a bit since he introduced it, so I'm guessing that it'd indeed be difficult to get the ~1:1 max profit-to-max loss that he looks for. The main thing I like about the trade is its speed. I think weekly trades fit my personality best, since that tends to be how I like to compartmentalize time in my mind. The idea of eliminating weekend risk is also nice. It should be possible, even with a VIX near 27.50 and given the skew, to find some favorable configuration. Commissions/fees are quite a drag though, so I need to continue to find ways to minimize them.
 
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I was lucky to lock profit at the open on Scott's trade and then little more on reminders. But purpose of this trade was different for me than for Scott.

Boxcar trade might sound like ideal trade but it is not. I'm wonder how Amy is handling this, she is a good trader.
 
Boxcar is just a single instance of family of trades know as Cockroach. You don't trade this things day in and day out. You look for good setup to put one on and need to be flexible how to put one on. Lately market wasn't favorable for Boxcart but I suspect Amy did ok. I'm interested in her style of trading. That's all.

'Scott's trade' means one of traders from Stratagem, which is run by trader named Scott :)
 
Okay, well my goal isn't really to replicate anyone else's exact strategy. I'm simply looking to add a strategy to my portfolio which satisfies certain requirements, i.e. - short DTE, no weekend risk, etc.
 
Most of my Boxcars are doing well. Small losses on those that do not perform well. As always, candidate selection, risk management and profit-taking triggers are key elements in any successful strategy in order to achieve positive expectancy. Downside moves are addressed by peeling off put credit spreads; upside moves are addressed by rolling up one or more debit spreads, closing one or more debit spreads, etc. As I pointed out, the Boxcar is a "mathematical" trade in the sense that the credit received from the put credit spreads must be balanced against the cost of the put debit spreads. These is a dynamic interplay between the two "sides" as time passes and the market moves.
 
Dan, I appreciate what you, and few others, are doing here, on Aeromir. You present your ideas at the open for everybody to utilize the way they want. Some traders like one kinds of ideas other do like others. Whatever benefits them. Such exhange of trading concepts is a source of traders' growth.
What I can complain a little is lack of public discussions about those ideas but it is of course not your 'fault'.
 
DGH said:
Most of my Boxcars are doing well
Click to expand...

I am assuming most of these done on stocks

Just curious have you done any boxcars on SPX lately ?
I did not mean to say ideal trade earlier I meant to say it was the ideal time to place the trade on
In the presentation the 10% down was still under the tent
If I try to place a trade like that now the 10% down mark is outside the tent and the premium received is about half that with 21DTE and around 16 Delta
 
status1 said:
I am assuming most of these done on stocks

Just curious have you done any boxcars on SPX lately ?
I did not mean to say ideal trade earlier I meant to say it was the ideal time to place the trade on
In the presentation the 10% down was still under the tent
If I try to place a trade like that now the 10% down mark is outside the tent and the premium received is about half that with 21DTE and around 16 Delta
Click to expand...

Options got cheaper, so I don't think it should be surprising that the lower short put is now < 10% from the money. The market's no longer moving 7 - 12% per day. [For context: 3 daily SD's with VIX ~27.50 == +-5.2%.]
 
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Yes, I am still trading SPX Boxcars in addition to selected stock Boxcars. The SPX trades are doing well. When I analyze a new trade I use the TOS risk graph to show the premium received from the put credit spreads independently of the premium paid to purchase the debit spread by clicking on each of the legs independently. If the setup is suitable, I launch the trade. After the fill, I repeat the process. Then, I determine trigger points for GTC orders to close one or more of the debit spreads and one or more of the put credit spreads. This approach has been working well for me.
 
DGH said:
Then, I determine trigger points for GTC orders to close one or more of the debit spreads and one or more of the put credit spreads. This approach has been working well for me.
Click to expand...

Dan, thank you for your input on this thread - it's always appreciated. I haven't used GTC orders with options because I worry I'll get hammered on the spreads/fills during fast moves. Can you talk a bit about your experience with execution?
 
I give the market makers a bit to make sure I get a fill. I place the trigger points for the GTC orders carefully to try to avoid a meaningless fill after an inconsequential move of the underlyng. While it is possible to receive a bad fill with a widened bid-ask spread, I have found that I usually appreciate being filled with an instant reduction in position deltas. Then, I have time to analyze the position and determine if something else needs to be done. For example, if I am filled on an order to close a debit spread after an upside move, I may decide to roll up the remaining debit spread(s), close another one (working the order), or combining a roll-up with an OTM put credit spread to help pay for the roll-up. Several possibilities. I must add that Amy's style is probably different from mine. If you are subscribed to her Service, I suggest following her lead.
 
The Boxcar trades in the service are doing well and still able to find plenty of candidates including the SPX. I'll be doing a round table soon on how the Boxcar service has been going and share the class trade performance as well as the feedback from subscribers. Maybe I can get Dan to attend as well? :)
 
Hi Amy, Dan,
I agree with others that we would appreciate if you could do a rountable about the Boxcar trade to see how it is doing
Also if you could include a more recent example in this lower vol market and see how it it worked out or perhaps just some guidelines on how to set up the trade in a low vol environment we would appreciate it
 
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