Today I went back to playing offense, something which I hadn't had a chance to do since the little crash in late August.
We are still 9 weeks away form expiration. I typically start trading a cycle at around 8 weeks to expiration, but this rule is in place in order for the running month's expiration to have passed so that when I initiate the new position, only two different option cycles at the most are being played. (For simplicity and due to health concerns I don't like to have positions in 3 or 4 different months at the same time. I start getting migraines).
So, today in the morning was September expiration and that left me with positions in October only. At that point I feel free to start playing November. So, now I have positions in two different months instead of three different months which is what I try to avoid. Having waited until next Monday or Tuesday wouldn't have made a big difference. The good thing about starting the cycle so early is that there is no pressure at all to get my order filled. If the market makers didn't bite today, so be it. With that in mind I requested a rather greedy credit, larger than what I typically get in these positions. I got filled at 1.75 Credit in a position where I typically get 1.60.
Trade Details:
Buy 2 SPX November 1630 Put @9.14
Sell 2 SPX November 1640 Put @9.61
Sell 2 SPX November 2100 Call @5.47
Buy 2 SPX November 2110 Call @4.19
Net Credit: 1.75 ($350 in 2 contracts per leg)
Expiration: 9 weeks
Break-even points: 1628.25 and 2101.75
Current SPX Price: 1958.03
It's nice to initiate an Iron Condor position with the VIX above 22. It allows you to go so much farther out. Look at the range between the break-evens. Almost 500 SPX points. Amazing.
A chart of SPX at market close for future reference:
(Click on image)
Current positions in the Portfolio:
October SPX 1700/1710/2195/2200 unbalanced Iron Condor
$280 credit, 4 weeks to expiration, 95% probability of success. Looking very safe with SPX currently at 1958.
November SPX 1630/1640/2100/2110 Iron Condor
$350 credit, 9 weeks to expiration, 76% probability of success. Lots of baby sitting ahead, but I liked it a lot today (which is irrelevant but makes me feel good)
I'm not done adding October positions. In fact I tried an October SPX 2100/2105 Credit Call spread yesterday during the post Fed meeting mini-rally. Just didn't get filled. If there is another price extreme in the near horizon I will try something with October options, but probably using RUT at this point.
Stay tuned for the Weekend Portfolio Analysis.
LT
Check out 2015 Track Record
Related Articles:
Weekend Portfolio Analysis (October 3, 2015)
Weekend Portfolio Analysis (October 11, 2015)
Weekend Portfolio Analysis (October 17, 2015)
Adjusted Call side to 2130/2140 (October 23, 2015)
Weekend Portfolio Analysis (November 1, 2015)
Sold November $SPX 1630/1640/2100/2110 Iron Condor for 1.75 Credit.
— The Lazy Trader (@lazytrading) September 18, 2015
This is the first trade of the November monthly options expiration cycle.
We are still 9 weeks away form expiration. I typically start trading a cycle at around 8 weeks to expiration, but this rule is in place in order for the running month's expiration to have passed so that when I initiate the new position, only two different option cycles at the most are being played. (For simplicity and due to health concerns I don't like to have positions in 3 or 4 different months at the same time. I start getting migraines).
So, today in the morning was September expiration and that left me with positions in October only. At that point I feel free to start playing November. So, now I have positions in two different months instead of three different months which is what I try to avoid. Having waited until next Monday or Tuesday wouldn't have made a big difference. The good thing about starting the cycle so early is that there is no pressure at all to get my order filled. If the market makers didn't bite today, so be it. With that in mind I requested a rather greedy credit, larger than what I typically get in these positions. I got filled at 1.75 Credit in a position where I typically get 1.60.
Trade Details:
Buy 2 SPX November 1630 Put @9.14
Sell 2 SPX November 1640 Put @9.61
Sell 2 SPX November 2100 Call @5.47
Buy 2 SPX November 2110 Call @4.19
Net Credit: 1.75 ($350 in 2 contracts per leg)
Expiration: 9 weeks
Break-even points: 1628.25 and 2101.75
Current SPX Price: 1958.03
It's nice to initiate an Iron Condor position with the VIX above 22. It allows you to go so much farther out. Look at the range between the break-evens. Almost 500 SPX points. Amazing.
A chart of SPX at market close for future reference:
(Click on image)
Current positions in the Portfolio:
October SPX 1700/1710/2195/2200 unbalanced Iron Condor
$280 credit, 4 weeks to expiration, 95% probability of success. Looking very safe with SPX currently at 1958.
November SPX 1630/1640/2100/2110 Iron Condor
$350 credit, 9 weeks to expiration, 76% probability of success. Lots of baby sitting ahead, but I liked it a lot today (which is irrelevant but makes me feel good)
I'm not done adding October positions. In fact I tried an October SPX 2100/2105 Credit Call spread yesterday during the post Fed meeting mini-rally. Just didn't get filled. If there is another price extreme in the near horizon I will try something with October options, but probably using RUT at this point.
Stay tuned for the Weekend Portfolio Analysis.
LT
Check out 2015 Track Record
Related Articles:
Weekend Portfolio Analysis (October 3, 2015)
Weekend Portfolio Analysis (October 11, 2015)
Weekend Portfolio Analysis (October 17, 2015)
Adjusted Call side to 2130/2140 (October 23, 2015)
Weekend Portfolio Analysis (November 1, 2015)
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Nice trade. I also sold a RUT and SPX iron condor today on one account that I manage. I got greedy with the call side too.
ReplyDeleteJan RUT 950/940 & 1300/3110
Feb 29th SPX 1525/1500 & 2200/2225
"For simplicity and due to health concerns I don't like to have positions in 3 or 4 different months at the same time"
Less positions will keep it simple for sure. I am okay having multiple positions in multiple months. I keep a simple spreadsheet and review it a few times a week to know exactly what positions are in the different accounts that I manage.