LSS

"short 8 of the SPXU puts @ 2.77 ea = 22.16 credit long 9 SPY puts @ 2.50 ea = 22.50 debit net debit = 0.34" How is this a hedge? SPY goes up x%, SPXU goes down 3x% --> price of SPY puts drop (you lose money on your long puts) & price of SPXU puts goes up (you lose money on your short puts) --> You will lose money when SPY goes up. SPY goes down x%, SPXU goes up 3x% --> price of SPY puts goes up (you make money on your long puts) & price of SPXU puts drop (you make money on your short puts) --> You will make money when SPY goes up.

I believe this is exact the difference between IB and Optionshouse or TOS. IB actually gives you the best price they can find on different exchanges, while OH/TOS cannot. I suspect that OH only fill spread orders when all legs can be filled on the same exchange, which delays fills significantly.

Great fill. Now more than $4.00...

I gave up trying to get good fills on spread/RIC with optionshouse. I started to leg in positions and got much faster fills. It seems to me that OH's so-called "smart-routing" only looks for the best price once and leaves your order at one exchange. Since the best prices for different legs of a spread/IC might appear on different exchanges, it seems to be the reason why they can't get fill together. Of course, by legging into positions, I am exposed to the risk of underlying price moving against me. But sometimes you get better prices too. So overrall it might be breakeven, and you get much faster fills.

AAPL back to $560 today, up almost 6%...

GOOG might be another calendar trade candidate too. Consolidating around $600 after earning.

True. Holding to the last day will definitely be exposed to gamma risk. Maybe longer term IC is a better idea? The RUT IC is in good shape now. Any other IC ideas?

I got out at $0.70. Should have exited around $1 when the pattern of low volume appeared. Although I only allocated less than 10% to this trade, it wiped out almost all my gains in May. Better trade positioning is needed.

Guess we underestimated the probably of AAPL staying in 560-575 this week and luck is not on our side either...will take loss after lunch if it still pegs around 570.

The calls just missed $3.50 before AAPL reversed...hard to manage day trade.

Good read Kim. The trade is looking very bad now, as AAPL seems trading in tight band of 564-568 now. Chris, are you still holding?

Chris, how will you handle to exit tomorrow if it opened within $560 and $575? The potential loss could be huge if it did not move tomorrow.

Chris, are you still in this trade? AAPL has been trading between 560 and 575 in the past few days. Any advice on how to close it? Let out when AAPL moved towards one end of the range and sell the other side when it reverses?

Thanks. I am in this trade for $4.10 too. Let's see how it plays out.

Looks like a good trade. The probability of AAPL moves $7 by next Friday is fairly high. Chris, assuming AAPL moved out of the $560-$575 range by next Friday, are you going to sell before expiration at $4.9+, or let it expire to get the max profit?