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Friday, October 25, 2013

December SPX Iron Condor

Today I opened the first trade of the December 2013 options expiration cycle as follows:

BUY 4 Dec SPX 1600 Put @5.10
SELL 4 Dec SPX 1605 Put @5.30
SELL 4 Dec SPX 1835 Call @4.00
BUY 4 Dec SPX 1840 Call @3.40

Credit: 0.80 ($320)
Max Risk: 4.20 ($1680)
Days to exp: 56

Implied volatility is low but it tends to remain that way for the rest of the year as markets are usually strong in November and December. I think this market is overbought at this point, with over 75% of stocks above the 20 Simple Day moving average but I feel the short Put at 1605 is safe enough.

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


 Check out 2013 Track Record

Related Articles:
Weekend Portfolio Analysis (November 2, 2013)
Weekend Portfolio Analysis (November 9, 2013)
Call Side 1835/1840 adjusted further up to 1850/1855 on November 14
Weekend Portfolio Analysis (November 16, 2013)
Weekend Portfolio Analysis (November 23, 2013)
Weekend Portfolio Analysis (November 30, 2013)
Weekend Portfolio Analysis (December 7, 2013) 



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1 comment:

  1. This is a nice December SPX IC. I will probably enter my first December bull put spread position next week. I will not have any bear call spreads for December because of the Santa rally that everyone is expecting. I will look to get in around 1600 too. I am hoping for a small drop next week. Markets do go down right? This year has been very unusual. I think it is safe to say this is the best bull market since 2007. I am going to limit the amount of contracts I sell for my bear call spreads to half until QE is slowing down. So I will end up with an uneven iron condor. Markets can remain overbought for a very long time. I hear chatter of 1800 this year. One of the best traders that I know thinks we will not hit 1800. A year ago, no one would have thought that RUT could be trading at 1120 and SPX over 1750 today. This goes to tell you no one really knows.

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