Wednesday, March 10, 2010

03/10 Daily Summary

So much for the people who have been saying the market is overbought.. :) I never really bother to use these oscillators, all I know is that NDX broke out of the range in a bullish pattern, OEX is not following suit though, so this might not be a wide-market bull run, at least not yet.. I’ve hedged my NDX butterfly and added the call butterfly to bring theta. Still working on my butterfly from last week, I’m starting to wonder what would be the best way to exit the butterflies without having to pay an arm and a leg to get filled.
Question for readers: If you trade butterflies, what has been your experience getting out of the position (aka selling them)?


PBER57 said...

Hi. The market is very strange right now. Very light volume squeezing the shorts. I am short a couple of positions right now. Big Institutions have not made their plays yet. Strange activity too on the VXX with massive buying the last couple of days. I expect a correction here and have exited all my longs

I do look at the Mcclellen Oscillator though for the general market conditions

My experience with butterflies is that the more liquid the product the easier it is to get out. Getting in is never seems to be a problem. I will work an order sometimes for most of the morning.

Gustavo's Trades said...

Hi there, thank you! I totally agree with both your observations..

I've been watching this light volume situation for quite a few days now, and have that thinking in the back of my mind regarding the big money and when they'll make their play...

So far, getting in the butterflies has been fairly easy, but I have a feeling that getting out might be a different story. NDX is fairly liquid, but the spreads on the butterfly order are huge, so who knows where the real mid is? :)

So, for now, it has been a wait and see, not to mention hedging the up-side for two weeks in a row..