OPENING: RUT OCT 18TH 1330/1345/1685/1700 IRON CONDOR
... for a 2.21 credit.
Metrics:
Max Profit: $221/contract
50 Max: $110/contract
Max Loss/Buying Power Effect: $1279/contract
ROC: 17.3% at Max/8.6% at 50 Max
Break Evens: 1342.79/1687.21
Delta/Theta: -1.31/3.07
Notes: A small, defined, high POP%-age engagement trade. This particular trade isn't very "tasty," since it goes out beyond that 45 days 'til expiry wheelhouse, sells strikes that are farther out of the money (the 10 deltas), doesn't collect nearly one-third the width of the strikes on fill, and isn't put on in an "ideal" premium selling environment. The trade-offs of doing things this way is a higher probability of profit (this one's around 74%), more room to be wrong relative to current price, and a slightly higher implied volatility metric in the back month relative to shorter duration.
I'm choosing RUT here over SPX, NDX, and IWM due to better liquidity relative to the other indices, as well as the lack of assignment risk versus IWM.
Will look to take profit at 50% max and manage intratrade on side test and/or side approaching worthless.
Metrics:
Max Profit: $221/contract
50 Max: $110/contract
Max Loss/Buying Power Effect: $1279/contract
ROC: 17.3% at Max/8.6% at 50 Max
Break Evens: 1342.79/1687.21
Delta/Theta: -1.31/3.07
Notes: A small, defined, high POP%-age engagement trade. This particular trade isn't very "tasty," since it goes out beyond that 45 days 'til expiry wheelhouse, sells strikes that are farther out of the money (the 10 deltas), doesn't collect nearly one-third the width of the strikes on fill, and isn't put on in an "ideal" premium selling environment. The trade-offs of doing things this way is a higher probability of profit (this one's around 74%), more room to be wrong relative to current price, and a slightly higher implied volatility metric in the back month relative to shorter duration.
I'm choosing RUT here over SPX, NDX, and IWM due to better liquidity relative to the other indices, as well as the lack of assignment risk versus IWM.
Will look to take profit at 50% max and manage intratrade on side test and/or side approaching worthless.
Comentarios:
A small, afterthought: One thing you'll notice with this setup relative to the exact same setup in the Sept cycle is that it's conceivable that it could reach 50% max one-third of the way through the cycle as opposed to half way through, which is what one ordinarily expects: a Sept setup with the exact same strikes prices out at 1.05.
Operación activa:
Small adjustment early in the cycle: rolling the 1335/1350 to the 1370/1385 short put vertical (short leg at the 10 delta) intraexpiry for a realized gain and a .26 credit. Revising take profit from the original 1.11 to 1.37 (1.11 + .26 = 1.37).
Operación activa:
Rolling the call side down to the 10 delta short leg -- to the 1630/1645 for a .98 credit. Scratch at 3.45.
Operación cerrada manualmente:
Out for 3.07 here, a small winner (.38/$38 contract).
