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Sunday, September 13, 2015

Weekend Portfolio Analysis (September 13, 2015)

The markets went up 1.75% this week in the face of universal bearishness. By the way this is the second article I'm writing today, I suggest you read The daily fluctuations of your easily influenced mood which initially was intended to be my starting commentary on the Weekend Portfolio Analysis but it turned out to be too long so I published it as an independent piece.

It was a pretty hectic week for me with a work deadline in a few hours and some heavy tasks that took a while. I had to put 8 solid hours yesterday as I watched my beloved Blue Jays completely demoralized the New York Yankees. It's only today that I have time to write on the site, and quite a start for the day it has been with ideas flowing easily. I thought my brain would be burned out. But nop. Here I am.

Market Conditions
(Click on image to enlarge)
Stochastics: 56 (neutral)
McClellan: +47 (neutral)
Number of Stocks above their 20 Day Moving Average: 43% (neutral)

No man's land once again. This is not the time for me to attack. Under these circumstances I play Iron Condors 8 weeks out, but November expiration is still too far for my personal liking (10 weeks away). So, I wait. In the meantime, I'm just like a sniper waiting for a price extreme to sell out of the money Calls or Puts, but obviously this is not the right time.

In the picture above, the little horizontal yellow lines represent my positions. All of them looking great. Resistance for the SPX, same as last week, 1990, 2040, 2135. Support 1868, 1820. In an ideal world I want to sell options above the high resistance numbers and below the support areas, but I want to do it during an extreme market mood once price has already advanced in one direction. So, not all the ingredients are there. That simple. Staying out of trouble for now.

September positions
RUT 900/910/1330/1340 unbalanced Iron Condor

SPX 1650/1675 credit Put spread

They will both expire on Friday morning for full profit. It is good to finally be through with the September cycle. It will end up as a 6% loss for the portfolio. I could have done a couple of things better in retrospective, but fortunately, we are "right side of the chart traders". We're real. I feel I traded fairly well and defended my capital effectively during the violent moves that we saw in late August. No regrets.

October positions
SPX 1700/1710/2195/2200 unbalanced Iron Condor
This one is looking very comfortable right now. With SPX sitting at 1961 very far from my pain points and now with an overall 92% probability of success. I like it, and will keep riding it.

Action Plan for the week
I'm really happy to say I have nothing to do this week. I'll let the September positions expire on Friday. I'll keep riding the October Iron Condor which is very unlikely to have any problems at all this week.

In addition to this I will wait for a market extreme. Give me a 3% rally or sell off and that will get me interested. If that happens I will start evaluating the RUT 1260/1270 Credit Call spread or the RUT 970/960 Credit Put spread using October options. If we don't have these type of moves, I will honor my alias, I'll forget about the markets and focus on developing good software for society during my working hours.

Economic Calendar

Thursday is the key day of the week.
Sunday: Chinese Industrial Production
Tuesday: German ZEW Economic Sentiment. US Retail Sales.
Wednesday: Europe's CPI, US's Core CPI
Thursday:  FOMC Statement, Janet Yellen speaks.

Good luck this week folks!

Check out 2015 Track Record

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  1. "I play Iron Condors 8 months out". I think you mean to say 2 months out.

    We are definitely in no man's land right now. That is why I did not have any new trades last week. But I did closed 2 existing positions.

    1. Closed RUT Sept 30th 1000/990 cps for $0.20 debit. Opened on 5/13/15 for $0.72 credit.
    2. Closed SPX Dec 31st 2275/2300 ccs for $0.35 debit. Opened on 8/3/15 for $2.00 credit.

    Current Positions:

    3 contracts of SPX October 30th 1650/1640 cps - currently profitable
    1 contract of SPX November 30th 1550/1525 cps - currently profitable
    1 contract of SPX December 31st 1600/1575 cps - currently showing a small loss
    1 contract of SPX December 31st 1500/1475 cps - currently profitable
    1 contract of RUT September 30th 1070/1060 debit put spread
    1 contract of SPX September 30th 1850/1840 debit put spread

    1. Thanks Jonathan.
      I actually meant 8 weeks, not months, out. I Just fixed it. Thanks.


    On Thursday, I closed all five SPX Oct 2200/2200 ccs using a pre-set limit order. I bought them back for 0.05. Originally sold for 1.35. Profit +$650.

    9x SPX Oct 1580/1600 cps
    6x SPX Oct 1530/1550 cps
    9x RUT Oct 920/940 cps + 4x RUT Oct 1250/1270 ccs
    7x RUT Oct 910/930 cps

    Next week, we will be 10 weeks from November expiration. I would normally start selling iron condor spreads. But at the moment, most of my account is blocked by margin covering October positions. If I manage to close some of them, I might sell to open new credit spreads in November expiration cycle. Otherwise, I will be watching the existing credit spreads. They should be fine with SPX above 1760 and RUT between 1030 and 1190.

    Good trading,