The June 2015 monthly expiration cycle is now in the books. The RUT 1130/1140/1340/1350 unbalanced Iron Condor expired for maximum profit yesterday improving the performance of the overall portfolio to +13.82% year to date. This is a decent return half way through the year and represents +27.64% annualized. It remains to be seen whether I'll be able to repeat this performance on the second half of the year, but I'm confident I can perform decently with all the lessons learned throughout the years and thanks in part to the feedback of many like minded traders and readers of this blog. Meanwhile, the S&P500 Index is up only +2.48% year to date, so needless to say, I'm feeling happy with my trading so far in 2015.
Market Conditions
(Click on image to enlarge)
Stochastics: 75 (neutral)
McClellan: +1 (neutral)
Number of Stocks above their 20 Day Moving Average: 59% (neutral)
We're in no man's land this weekend. Price extremes have been really scarce this year, which is the direct cause for my passivity and smaller number of trades. Only 7 trades so far in the first 6 months of the year, for a projected total of 14 by the end of 2015. Way below my annual average. In the previous 3 years sharing my trades I have always made more than 40 trades per year. However, I must say I don't mind the smaller number of trades. I prefer to not force less than ideal entries that end up negatively impacting my returns. I've also come to enjoy this lower level of stress, much less concerned when fewer positions are in play, more cash is held in my account and keeping my commission costs very low.
Anyways, no man's land territory again. Not the ideal time for neither Credit Put spreads nor Credit Call spreads. It is however my sweet spot for long term Iron Condors, which I will talk about in the Action Plan for the Week section.
July positions
SPX 1935/1940/2220/2225 unbalanced Iron Condor
88% probability of success and 4 weeks to expiration. With SPX sitting at 2109.99 I am not concerned here. This has been a good trade so far and all indications are, it will expire for max profits in 4 weeks. Time will tell. This is the only position held in the account right now and I'm more than 80% in cash.
Action plan for the week
The July SPX 1935/1940/2220/2225 unbalanced Iron Condor will not reach adjustment points. I estimate that the Call side (2220) will reach 30% probability of being in the money during the week if the SPX index hits 2195. That's 85 points above current level (+4%) which is a very infrequent event. Now, on the way down, the 1940 Put could reach 30% probability if SPX falls down to around 2000 (110 points below current level or roughly 5.5%), another infrequent event. So, I don't anticipate having to touch this position.
As for new positions, by Friday we will be 8 weeks away from August expiration and I will look into adding my first August position during the next few days. So far my candidate is the RUT 1130/1140/1360/1370 Iron Condor, looking for 1.60 credit in total (0.60 credit on the Put side and 1.00 credit on the Call side, or 0.70 and 0.90 respectively). Now, what I'm not sure of is whether to play it unbalanced or not. What do you guys think? Should I play it unbalanced this time or fully balanced? It is a close call for me. If I were to sell the 1350/1360 Call side (10 points lower), instead of the 1360/1370, I would definitely play it unbalanced (half position size on the Calls in respect with the Puts), but with 1360/1370 I'm not 100% sure what I will do, as it is right there on the projected upper end of the trend line:
(Click on image to enlarge)
As I always say, my final position may differ as the markets will move away from the prices reflected today on this article, but that's roughly my plan.
Economic Calendar
Monday: US Existing Home Sales, China's Manufacturing PMI
Tuesday: Europe's PMI. US PMI, Durable Goods, New Home Sales
Wednesday: US GDP
Good luck this week my friends.
Check out 2015 Track record
Market Conditions
(Click on image to enlarge)
McClellan: +1 (neutral)
Number of Stocks above their 20 Day Moving Average: 59% (neutral)
We're in no man's land this weekend. Price extremes have been really scarce this year, which is the direct cause for my passivity and smaller number of trades. Only 7 trades so far in the first 6 months of the year, for a projected total of 14 by the end of 2015. Way below my annual average. In the previous 3 years sharing my trades I have always made more than 40 trades per year. However, I must say I don't mind the smaller number of trades. I prefer to not force less than ideal entries that end up negatively impacting my returns. I've also come to enjoy this lower level of stress, much less concerned when fewer positions are in play, more cash is held in my account and keeping my commission costs very low.
Anyways, no man's land territory again. Not the ideal time for neither Credit Put spreads nor Credit Call spreads. It is however my sweet spot for long term Iron Condors, which I will talk about in the Action Plan for the Week section.
July positions
SPX 1935/1940/2220/2225 unbalanced Iron Condor
88% probability of success and 4 weeks to expiration. With SPX sitting at 2109.99 I am not concerned here. This has been a good trade so far and all indications are, it will expire for max profits in 4 weeks. Time will tell. This is the only position held in the account right now and I'm more than 80% in cash.
Action plan for the week
The July SPX 1935/1940/2220/2225 unbalanced Iron Condor will not reach adjustment points. I estimate that the Call side (2220) will reach 30% probability of being in the money during the week if the SPX index hits 2195. That's 85 points above current level (+4%) which is a very infrequent event. Now, on the way down, the 1940 Put could reach 30% probability if SPX falls down to around 2000 (110 points below current level or roughly 5.5%), another infrequent event. So, I don't anticipate having to touch this position.
As for new positions, by Friday we will be 8 weeks away from August expiration and I will look into adding my first August position during the next few days. So far my candidate is the RUT 1130/1140/1360/1370 Iron Condor, looking for 1.60 credit in total (0.60 credit on the Put side and 1.00 credit on the Call side, or 0.70 and 0.90 respectively). Now, what I'm not sure of is whether to play it unbalanced or not. What do you guys think? Should I play it unbalanced this time or fully balanced? It is a close call for me. If I were to sell the 1350/1360 Call side (10 points lower), instead of the 1360/1370, I would definitely play it unbalanced (half position size on the Calls in respect with the Puts), but with 1360/1370 I'm not 100% sure what I will do, as it is right there on the projected upper end of the trend line:
(Click on image to enlarge)
Economic Calendar
Monday: US Existing Home Sales, China's Manufacturing PMI
Tuesday: Europe's PMI. US PMI, Durable Goods, New Home Sales
Wednesday: US GDP
Good luck this week my friends.
Check out 2015 Track record
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