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BookingAlpha Option Trading Advisory

Tuesday, December 23, 2014

February 2015 SPX Iron Condor

Today I entered the first position with February 2015 monthly options as we are getting close to 8 weeks away from that expiration cycle.

Here's the trade:
Buy 4 SPX February 1875 Put @8.45
Sell 4 SPX February 1880 Put @8.65
Sell 4 SPX February 2190 Call @4.35
Buy 4 SPX February 2195 Call @3.75

Credit received: 0.80 ($320 for 4 contracts per leg)
Max risk: 4.20 ($1680 for 4 contracts per leg)
Days to expiration: 58

I played the same number of options on the Call side as I did on the Put side. The reason for this is because I think 2190 would be a very extreme price for SPX to reach by February. The projection of the uptrend channel I drew points to 2160. Also the market is currently 3% above its 50 Day Moving Average which has proven to be close to extremes in the past. So I felt safe selling Calls up there and decided to be aggressive and not cut my Calls size in half, as I will do in other occasions.

A chart for future reference, a couple of hours after the trade was entered:
(Click on image to enlarge)

Positions after this trade:
January SPX 1820/1825 Credit Put Spread
$120 credit. 99% probability of success. 23 days to expiration.

February SPX 1875/1880/2190/2195 Iron Condor
$320 credit. 74% probability of success. 58 days to expiration.

No concerns so far with 2015 positions.

Check out 2015 Track Record

Related Articles:
Weekend Portfolio Analysis (January 3, 2015)
Weekend Portfolio Analysis (January 10, 2015)
Weekend Portfolio Analysis (January 17, 2015) 
Weekend Portfolio Analysis (February 8, 2015)
Weekend Portfolio Analysis (February 14, 2015) 

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1 comment:

  1. I like this iron condor. It is hard to see the market going up another 100 points next 8 weeks unless something exceptional happens in the world economies. I can see us going down 100 points next month.