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BookingAlpha Option Trading Advisory

Wednesday, April 24, 2013

Closed May 2013 RUT 855/850 Bull Put Spread

The Put side of the May RUT 850/855/1000/1005 Iron Condor was closed today.

As per the plan laid out over the weekend, with two Bull Put spreads in the portfolio vs only one Bear Call spread, I wanted to get rid of this 855/850 RUT Credit Put spread.

The spread was initially entered for a small 0.30 credit, so the final result is a small 0.10 profit (4 contracts per leg * 0.10 * 100 = +$40).

This close was just in order to balance portfolio risk and not have too much downside exposure. I wouldn't have closed it if it was the only position in the portfolio as it certainly didn't feel threatened at this point.

After closing this position, two others remain open in the portfolio:

RUT 1000/1005 Bear Call Spread  (0.55 credit and RUT currently at 934.11)
SPX 1440/1445 Bull Put Spread (0.50 credit and SPX currently at 1578.79)

Combining both positions and beta-weighting vs SPX here's how the portfolio looks:
(Click on image to enlarge)

With SPX roughly between 1445 and 1675 by May 17 (just 23 days) maximum profit will be reached without closing commissions (that's if everything is left to expire worthless). 95% probability for that scenario to play out. So, definitely very comfortable with this portfolio now, and time to start looking at June positions for new challenges.

Take it easy! But take it anyways.

Check out Track record for 2013

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