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Wednesday, August 7, 2013

September 2013 $SPX Iron Condor

Today I entered the first September trade as follows:

Broken down per strike price:
Bought 3 SPX September 1560 Put  @4.00
Sold 3 SPX September 1565 Put   @4.30
Sold 3 SPX September 1760 Call  @2.95
Bought 3 SPX September 1765 Call  @2.40

Credit: 0.85 ($255)
Margin: 4.15 ($1245)

Probability of success: 81.30%

I decided to enter only 3 contracts per leg this time as the VIX is at the bottom of this year's range around 13. (Options premium is low and forces you to get closer to the money). If this Iron Condor needs an adjustment I will do it with 5 contracts per leg. I will be adjusting as soon as any of the strike prices has a 30% probability of being in the money by expiration. I entered both with around 10% probability today.

Finally a chart of SPX for future reference.
(Click on image to enlarge)

Check out 2013 Track Record

Related Articles:
Weekend Portfolio Analysis (August 10, 2013)
Weekend Portfolio Analysis (August 17, 2013)
Weekend Portfolio Analysis (August 25, 2013)
Weekend Portfolio Analysis (August 31, 2013)
Weekend Portfolio Analysis (September 7, 2013)

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  1. Hi Henrick,

    I like the put spread of your iron condor. I am sure the call spread is 'safe' for now, but this market is the bullish I have seen since 2007. I would not feel safe with any call spread.

    Personally, I would just leave it off and put it on when there is less than 30 days to expiration. Another thing I would have done would be to make my bear call spread further out like 1780/1785.

    You should be okay putting your bull put spread closer since this market is still very bullish. Even if the market has a correction, it will give you plenty of time to adjust the put spread.

  2. Hey buddy,

    Thanks for the suggestions. I agree that the call side is aggressive in this play but unfortunately going only 5 points above that was yielding almost nothing. going with the 1780, I dont remember but it was probably yielding something like .20 or .25. So, I figured, I would take my chances, although I played only 3 per leg, because I agree with you, it is pretty risky.

    Thanks man