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BookingAlpha Option Trading Advisory

Monday, November 4, 2013

Closing the Call side of the November 2013 $SPX Iron Condor

Today I closed the Call side of the SPX 1565/1570/1800/1805 November Iron Condor as the market is not at an extreme overbought condition anymore according to the parameters I follow and the 1800 short Call is barely 2% above current price.

In more detail:

Bought to close 4 SPX November 1800 Call  (@0.90)
Sold to close 4 SPX November 1805 Call (@0.60)
Net Debit 0.30 ($120 for 4 contracts per leg)

This Bear Call spread side of the Iron Condor had originally been entered for a 0.40 credit. Closing it for 0.30 means there was a small 0.10 profit here ($40 for 4 contracts per leg). The profit is not the most important factor here. I basically closed it because I think 1800 is within reach in a two week period with a market that is not extremely overbought anymore (it has digested the recent rally via both price action and time). I didn't want to play with that risk.

After closing this spread the rest of the positions in November look very comfortable and combined they yield a total credit of $480:
SPX 1565/1570 Bull Put spread 100% probability of success and $160 credit.
SPX 1520/1525 Bull Put Spread 100% probability of success and $160 credit.
RUT 1160/1165 Bear Call Spread 92% probability of success and $160 credit.

As for the two positions with 100% probability of success, I don't think there's anything 100% sure in this business, I'm simply reporting what the platform says. But regardless, it is very likely that those positions will represent no problem at all.

As usual a chart of the SPX Index after market close today for future reference.
(Click on image to enlarge)

Check out Track Record for 2013

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  1. Hello LT, Very exciting week! Look forward to you comments tomorrow. Can you tell me where I can get the weekly RUT settlement value? Usually it comes out on Friday morning? Thanks!

  2. Hey LEN! One of my most loyal readers for over a year now! Thanks for your comment. Pretty exciting week indeed. Im doing some tourism and might now post a weekend analysis tomorrow. We'll see. As for your question on the settlement value, idea!!! I always assume is the first price in the morning, but Im not sure if that's the case.