SPDR S&P 500 (SPY)

[DowDeva]

OT: Hey Professor Robbin!

I set up an account with $250 in it after I talked about credit spreads and I already have $325 in it. I would have had more but I ran and bought back the short put spread at a loss when I saw that close. Which I later saw I didn't have to do. Oh well.

I use /es credit spreads because you can close the option at any time if there is news that might adversely affect it after the bell. In addition, I am willing to use the whole amount in the account just to make $15 if I have to. I have also sold a spread for $60 ($120 handles. Or is it points? I always forget) for a spread. I will mostly sell on the day before expiration day to get a good price for these way out of the money option spreads (but avoid whipsawing by selling the spread too early, as in two days before). Selling the day before also benefits from fast theta burn on expiration day. The exception is Fridays. I never sell a credit spread on Friday for Monday. I don't carry over the weekend.

With the /es that's three times a week, selling credit spreads at the top/bottom of resistance or support using my (or your) indicators. As the account grows I'll be able to sell more contracts and it will grow faster. You have to be willing to make only a couple of dollars against a large investment, which is what the trading gurus always recommend never to do.

I do tweak the spreads if I am sure the trend is going to go against the spread (in a good way); e.g., sell a short credit spread that I placed the day before expiration for .05 on expiration day and get more money for a higher one (but still safe!)

Think about it.

Good Lord, gotta' get back to bed.

Later and good luck to you.

~d