bling wrote: ↑Wed Sep 22, 2021 6:31 pm
how do you select the strikes?
e.g. if you want to borrow $1000 you can basically sell the box for 4300/4310, or 4310/4320, or 4320/4330, etc. they all yield roughly a $1000 credit to your balance.
Honestly, I don't think it matters at all. adamhg's post clearly shows that strike prices that aren't close to actual price will still get filled. It's only the spread that matters, not the strikes themselves.
nalor511 wrote: ↑Wed Sep 22, 2021 6:50 pmI can (roughly) understand it, but not well enough to execute it without a tutorial, and as far as I can tell there is no tutorial for doing this at say Schwab or fidelity. I'm not willing to use IB, but would love to do this
I followed the post here, which was very helpful:
https://www.lesswrong.com/posts/8NSKMMD ... tly-faster. The linked spreadsheet is legit, but it's clearly not a tutorial. This... isn't for the faint of heart. I mean there's certainly a chance of messing up and paying big time. I had personally NEVER touched options before, much less an options "combo," so I checked, double-checked, and triple-checked what I was doing before setting it up, and you can see I posted here asking for someone else to verify I was doing it correctly. But yeah, not for the faint of heart.
FWIW I majored in finance though (although I'm 10 years out of school and I don't work in finance), so a lot of these concepts are familiar to me.
parval wrote: ↑Wed Sep 22, 2021 7:50 pm
What's the plan when it come to expiration?
I assume we can't just open 8 leg order to roll like we do for single option into spreads.
Do we just let it expire? Afaik SPX is cash settled, so just pay margin interest until we open the next box?
If it's cash settled, then yeah, just open up new boxes ASAP (assuming investment objectives/strategy hasn't changed). I paid interest on margin for years. It's only like 1% higher than the rates on these boxes, not going to hurt to do that again for a few days at most.