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Saturday, August 10, 2013

Weekend Portfolio Analysis (August 10, 2013)

SPX moved from 1708.01 to 1691.42 this week for a -0.97% loss. I took advantage of the accelerated time decay in August, and this small market decline to close the RUT 1080/1085 Bear Call Spread this week for a $200 profit. And I also opened the first September position using an SPX Iron Condor and playing it small (only 3 contracts) due to the low Volatility. Ideally for Iron Condors you want to sell inflated option prices (high volatility).

Market conditions

(Click on image to enlarge)
Stochastics 38 (Neutral)
McClellan -98 (Neutral)
49.28% of stocks above their 20 SMA (Neutral)
68.14% of stocks above their 50 SMA (Neutral)

On the way up, 1710 could offer some resistance.
On the way down 1670 looks a little stronger as support and then 1650 was former resistance and it's where the 50 SMA is located. That spot could offer some support too.

We are in no man's land and there is plenty of room to move either up or down. I would avoid selling close to at the money options at this point. Even though August is a month of low trading activity, I wouldn't take chances close to at the money strikes, as there is room to move and with low volatility you are not being compensated enough for the risks taken.


August positions
August SPX Iron Condor(1560/1565/1745/1750) Looking very comfortable. Hopefully expires worthless this week, and helps mitigate the original position. Remember that this Iron Condor was an adjustment. The original was a $300 loss which will be more than recovered by this one this week. Probability of success 96.40%.
(Click on image to enlarge)


September positions
SPX Iron Condor (1560/1565/1760/1765) the position that was entered a few days ago. With SPX wandering around 1690 I'm not concerned here.


Plan for the week
The August SPX Iron Condor(1560/1565/1745/1750) should expire worthless this week. Which will bring August's result into positive territory.

The September Iron Condor, is very new and it probably won't be complicated this week. So, chances are low that I will need to adjust it.

As for new September positions, I would need the market to go to one of the extremes. I don't want to sell anything right now. Preferably it goes down, VIX goes up and I get to sell an out of the money Bull Put Spread in RUT. But I need a good move for that, maybe a -3% or something like that. So chances are no new positions will be entered this week.


Economic Calendar
Tuesday - German Zew Economic Data, European Industrial Production, US Retail Sales
Thursday - US CPI, Initial Jobless claims
Friday - Building permits, Housing starts

Good luck this week folks!

Check out Track record for 2013


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2 comments:

  1. IV has been pretty low all year making it harder for credit spread sellers to stay far away from the underlying. What I have been doing is selling only credit put spreads since they give more credit and provide some advantages that credit call spreads simply don't have.

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  2. Thanks for the feedback. However, remember that the market falls faster when it decides to. It hasn't happened this year, and great for all the ones that have only sold Put spreads. But I suggest you backtest your strategy to 2008, 2009 for example, just to know how safe or risky you are being. We are in a bull market this year, but really, nobody knows when that will change.

    Cheers,
    LT

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