What place did you join?
Didn't they teach you anything?
No, they just sat us in front of a simulation and told us to start feeling the market?
What place did you join?
Didn't they teach you anything?
No, they just sat us in front of a simulation and told us to start feeling the market?
Hi all,
Here my first post.
I'm doing spread trading until some months now and I always close my position before spread expire to lock my profit. But now, I have some bear put spread deep in the money so I want to keep it until expiration.
My question is, how I doing that? Did I need to exercise the option I have bought (the third friday of the month) and wait that my short position was exercising by the person that buy it? Or all is automatic and my broker do every thing at the exipration of the spread?
I'm using optionsXpress.
thanks
Specifics on the option?
Different exchanges/markets have different exercising and assignment...
"i have some bear put spread deep in the money"
If this were Corn, for example you will be assigned a short position for the Higher strike price, then off-set at the lower strike price.
You of course get hit for a commission on each assignment, so it would behoove you to liquidate the 'deep in the money' put spread and go ahead and give the arbitrageurs their couple of ticks for letting you out...
Again, without specifics, a bit of a challenging question to answer.
Drewfus
I have given you enough time to think about this. There is no need to complicate this very simple matter. If you are trading with your own capital you can do anything that you want. Taking profits at any time is OK. This has nothing to do with taking the next good trade. If you have the funds, and you have a good entry, take it.when trading spreads it is also important to figure out what percentage of the your account you want to commit to a spread.
If you are starting out you should be trading low-risk calendar spreads. The margins should be less than a thousand a spread, with your stops closer than that. If you keep about a $1,000.00 per spread you can enter the spreads. When you have profits on one you can enter another.with the margin not necessarily, or should I say hopefully, not being 100% of committed capital.
Capital changes day to day. Rom is an objective measure that anyone can use to measure the gains on a spread win.Then, I'd say that the best measure is return on the portion of the capital committed to the trade.
This is pure baloney. You can start with a small amount of original capital. Before a spread is complete it spins off unrealized profits than can be used as margins for additional spreads. These can be in the same commodities or something else. All of these gains can be earned without committing any new original capital to the trades.Account size 100.000, divided into 10 portions of 10.000 each.
Sure you can trade ten spreads as long as you have enough margin, capital to cover your drawdown’s, plus slippage. If we traded the same ten spreads with only $10,000.00 we would have ten times the gains as this lame less 7% solution Tharp has you seeking.This means you can do 10 different spreads at a time.
Depends on your stop. It is hard to imagine Parabolic trailing that far away.Required margin of a spread is 500, but you're willing to let the trade go 1.000 against you before stopping it (stoploss).
Why not??You don't want to risk more than 5% of the total account size on any trade.
Why risk so much?[/FONT]so 5.000 is max risk.
When you trade spreads the exchange is really taking you at your word. They are financial partners on your trade. The amount that they ask you to put up includes what they in their wisdom assume is the risk.The thing with looking at Return on Margin is that, while the number itself looks absolutely stunning, sometimes the margin can be very misleading as to the risk of the position.
As a rough guide line if you have about $1,000.00 behind low-risk, low-margin calendar spreads at the time that you put them on. You should have enough. [/FONT]We have to trade spreads as the come available. When you work up to three uncorrelated spreads, the diversification should keep your drawdowns manageable. The best spreads are picked up near the seasonal lows. After about a week they should not threaten your entry point as the seasonal picks up momentum. Gains from these can be used for more spreads as their seasonal windows open.[/FONT]This whole thing relates to portfolio theory
Paulds, in general a seasonal pattern will run the greater part of a year. There is no reason that markets should equalize on any one-day. But every reason why they should adjust every year at about the same time. The low-risk high profit spreads we use computers to isolate, are for the most likely periods these adjustments will occur. Because of the expiring nature of the contracts that we use, often one side at a time, of a spread will need to be rolled into different contracts.hmm.. interesting post.. I wondered if anyone could shed more light on the timescales for various spreads
Spreads are simultaneous transactions. This means that they take place at the same time. How are you going to get simultaneous trades during a session?... is it a feasible and widely held notion that one can Scalp the spreads intraday or it this simply not the mechanism or timescale to consider such options with spreads...?
It is to the exchanges credit that they make the seasonal research that they pay for, available to the public for a nominal fee.Also, I am surprised that with all the information that the Exchanges supply regarding spreads and margins on those spreads
Spreads take a little more training, which I am afraid brokers, just do not take the time to understand. Don’t they see we pay double commissions?that here is not any decent information regarding suitable calculation and mathematical tools to manage the spread once applied
On simple spreads, we always chart the long side first. If you think it is going the wrong way switch the data around. On a spread chart we are looking for the spread to go up.one could enter a spread and realize that the spread is working in the opposite direction, if that being the case I would presume that one could simply short the spread instrument once it is created
Ignorance is more like it. The rewards are there for returning traders.this is what I mean by the "secrecy" in the markets regarding these spreads and management thereof..
Trading a spread between puts and calls, is not the same as trading the spread between two futures contracts.[/FONT]I'm doing spread trading ... But now, I have some bear put spread ...Did I need to exercise the option