Parking Trade

Discussion in 'General Discussion' started by kgbist, Jan 24, 2018.

  1. kgbist

    kgbist Member

    Anyone been doing the parking trade? Don't see too much discussion in the forum on it.
     
  2. Tim

    Tim Well-Known Member

    Hi, I am not currently doing any parking trades but I will open a small one if we get a good down day. That hasn't happened for awhile...
     
  3. spread_trader

    spread_trader New Member

    Hi, I entered a Long Term parking trade on 1/23 with SPX = 2837 at about 1pm cst. My initial entry was for 3/16 expiration to sell
    2640 and buy 2615 puts at -1.20 (mid-point). It did not fill and then I remembered Tim P comment to check the volumes
    and try to use 25 strikes. I cancelled and changed to -2650/2625 at -1.30 (mid-point). It filled immediately. So big thank you to
    Tim for his rules. I entered 1.8 SD below the market and went out 51 DTE, 25 point spread, and got 1.30 credit. I did the Long
    Term since it was my first trade.
    So far, it's up 0.30, thanks to big up day Friday.

    Big thank you to Tim P. for the Long Term Parking Trade guidelines. I'm very new her and I think this site and all of the people are awesome.
     
    Last edited: Jan 28, 2018
  4. I have done the trade 3 straight weeks. Did March 16 3 weeks ago and still in the trade but short is 2600 and should be out in the next 2 weeks with no market movement. Did one a week ago Tuesday on the down afternoon Feb 16 exp for $1.20 and was executed on my by at .20 this Friday at 4:07 Pm. Market makers didn't want to give in all day. lol
    Also put one on during the downdraft earlier this week for Feb 23 with my short at 2710
    I have modified the trade. On short term I move to get $1.20 and sell at by back at .20. The idea is with $1880 margin and $5 in commission and fees at tasty works I make $95 on 1880 margin witch is 5%
     
  5. status1

    status1 Well-Known Member

    Is the parking trade basically a short vertical ?
    I did not know it at the time but I guess I was doing a version of that late last year just to collect a little more premium than the BF trades
    I was doing it a little bit closer about 2-3 weeks out to take advantage of the faster decay
    I was also doing 30 wide on SPX with 3 lots and collecting about 1.05-1.10 but I would only hold it to get a little over 2% so about 8-10 days Ideally it would have been nice if I could to get 2% per week that way I would make 104% on margin in one year but it doesn't always work out that way so you have to keep it a little longer but it's still a good deal
    This was in the NOV DEC time frame

    I am a little nervous putting one on at these levels I try to be a little cautious and putting them on more selectively not mechanically one after the other Maybe after a little pull back (when ?) or some sideways movement
     
  6. Parking trade is a short vertical
    I put one on Tuesday
    March 2
    2670-2650 put spread for $1.20
    I like it. 150 points out of the money with the current volatility.
    So far down $15 but no concern at this point
    Just following the parameters.
     
  7. status1

    status1 Well-Known Member

    That should work
    My concern was that with the low volatility and the high price I may be trying to put one on too close but after it came down and volatility even higher you can go further out since you get more premium for the same spread
    I will wait a little more to settle down before I start to look at it again
    There is a small gap at 2767 so if that gets filled I think that may be a good time to get in
     
  8. status1

    status1 Well-Known Member

    Wow that was quick
    I did not think it would fill that fast and even so there are still a couple of gaps lower at 2714 and 2695 and that would round trip the entire move from January That was ridiculous I mean what are some of these traders thinking ? They want the entire gain of the year to happen in a couple of months ?
    if it fills those gaps I think after that it should settle down and hopefully trade a little more normally
    It may undershoot a bit but at that point it should be back to the mean on the regression line and continue on a bullish path
    but hopefully on a more measured pace
     
  9. status1

    status1 Well-Known Member

    Tim showed a couple of Parking trades he put on in the Trading group 2 video if anyone is interested in the strategy
    He put it on before the big plunge at 2700 so that may be in trouble and he may have to close it if he goes by his rules
    Of course it's easy to analyze the trade today knowing what happened and looking back
    It should be interesting to see what the reaction will be next week not just for him but for other trades also
    Even a 5% correction is only down to 2730 so there is still some room and still plenty of time
     
  10. TomC

    TomC New Member

    I have been doing the Parking Trade for 28 straight weeks now. Still showing an overall gain. Learned one thing, stop loss orders @ 3.00 get triggered prematurely. I've quite using them. I plan on continuing with my Parking Trade campaign. Thanks Tim!
     
  11. Tim

    Tim Well-Known Member

    MY trades were stopped out on Friday at what appears to be premature stop limit order. However I am sure that it quoted at $3.00 briefly, even momentarily which activated the limit order. They were closed at around $2.50 so my loss was very limited.

    This has happened before. I called TOS once and complained that it never quoted at $3.00 and was told, if you look at time and sales data, it had, if only for milliseconds.

    So yes, stop limit orders don't work too well for options. Oh well, go on from here to the next trade. I really didn't want to have to look at these parking trades and so, the risk of early exit was acceptable.
     
  12. status1

    status1 Well-Known Member

    Hi Tim
    Is there a time stamp on what time that was filled at ?
    It looks to me like around 15:10 on the minute chart there was a bounce at the low of 2762 so I am thinking after the stop was triggered SPX has started going up so that's why you got filled at 2.50 which is pretty good considering you could have been filled at 3.00 or worse
    After that brief bounce it went down again into the close and checking it after hours it shows the mid price at 3.75 so you would have been stopped out eventually
    The volatility probably did not help either as it peaked right around that time
    The volume and open interest also exploded at the 2700 level
     
  13. Tim

    Tim Well-Known Member

    it was at 3:06:50 when it filled, for 2.15. that was my 2645/2625 PT.

    My 2700/2680 PT filled for $2.65 at 10:09:54. Again my stop was 2.95 with a limit of 3.05
     
  14. status1

    status1 Well-Known Member

    So you closed out the 2645/2625 also even though it did not reach 3.00 ?

    Looks like the market is recovering from the gap down
    Let's see how it will be at the end of the day
     
  15. Tim

    Tim Well-Known Member

    It was closed by the stop limit order too. So it must have quoted at 2.95 momentarily.
     
  16. status1

    status1 Well-Known Member

    Just as well
    Looks like the carnage continues
     
    Philb likes this.

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