Posts Tagged ‘ spx ’

Back Testing an Options Strategy

Apr 16th, 2014 | By | Category: SMB Options, Systems Trading
Note: The following contains hypothetical results; simulated using historic data. As mentioned at a recent SMB Options Tribe meeting; a group of¬†options traders are now working to back test a proprietary momentum signal using a variety of options trades. Several tests have come back with varying results... but we are seeing a common thread for options trades that show low draw downs and smooth returns. The following represents the current best SPX options application for this signal called SPY Detector. (click to enlarge)   We have five other options strategies currently being back tested on these signals. Read more [...]

The Case for Wider Option Spreads

Feb 10th, 2014 | By | Category: Options Education, SMB Options
When analyzing a vertical based credit spread, including iron condors and butterflies, the first question that usually comes up is where to place the short strike. In a distant second usually comes the question of where to place the long strike, that is how wide the spread will be. This leaves some analysis to be done on using more contracts for narrow spreads or fewer contracts for wide spreads. At first glance it seems to be a better deal to narrow your spread and double the number of contracts. This is a major misconception I had about credit spreads when I started trading and later discovered the real trade off which I will Read more [...]

Coming in to the final hour for the SPX ‘fly

Nov 9th, 2012 | By | Category: General Comments
This post is another in a series that we will be publishing which track the hypothetical performance of broken wing butterfly trades selected by Greg Loehr of There's only a little more than an hour left in the trading day and the expiration of the SPX weekly options, but there's still plenty of action left in the hypothetical broken wing butterfly that I've been tracking in this blog. As I write this the SPX is printing 1385. The butterfly I identified last week is the 1385-1380-1370 put fly for a $0.35 credit.  Using the mark of the current option quotes the spread could be sold for a 75-cent credit, although Read more [...]