SPX trade follow up

I did not get my fill this morning on either of the SPX spread trades. It is early yet, I am going for the 1460/1465 spread trade intitially placed for .60. I may have to settle for .50 if the index rebounds at all today. DO NOT CHASE this index. Do not settle for the going rate right now of .25 it is not worth the risk, wait for a rebound and go for the .50 or .60 on the 1460/1465 and wait for the $1.00 for the 1450/1455 trade. We may not see it and this trade may get away from us. Let it go, there are more to be had…such as the March expirations!!!

I am going for the SPX FEB 1460/1465 because if resistance is broken at 1445 I have much more room to play with than the 5 points needed to break my 1450 short. It makes it a more conservative play, especially since we are breaking one of the rules of trading against the trend.

Right now I am reexamining volatility and I will have a discussion about how to trade with volatility in the next few days. Right now volatility is against us in this trade. We are trying to sell options for a credit, unfortunately the volatility on this index is low right now, bad for selling. The average volatility for the SPX is around 11 and right now we are around a 7 in volatility. More on this later.

No Tags