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BookingAlpha Option Trading Advisory

Friday, August 26, 2016

October RUT Unbalanced Iron Condor

Trade details:

Sold 20 October RUT 1100/1110 Credit Put spread: 0.65 Credit ($1,300)
Sold 10 October RUT 1320/1330 Credit Call spread: 0.90 Credit ($900)

Total  Credit received: $2,200
Days to expiration: 56
Break-even points at expiration: 1109, 1322
Probability of success: 77%

A RUT Chart at market close for future reference and self-study:
(Click on image to enlarge)

Trade Update - September 30, 2016

Closed 20 OCT RUT 1100/1110 Credit Put spread for 0.13 debit (original credit was 0.65) $1,040
Closed 10 OCT RUT 1320/1330 Credit Call spread for 0.09 debit (original credit was 0.90) $810
Net Gain: 1.85 ($1,850)

Closing this position was not part of the plan described in the Weekend Portfolio Analysis. However, I never imagined the position would make so much money in just a week. It was hard to ignore the profit picture below:

(Click on image to enlarge)
Most of the profits had been made, and expiration was still 3 long weeks away.
Long-time readers and LTOptions members know I have an inclination to keep riding positions for longer, many times until expiration, especially in a case like this one where both sides were perfectly safe. But, again, it is hard to ignore that all that was left here was just risk, and small profits, not for one week, but for three.

In addition, I'm not playing with house money here. If I was up +20% for the year, I would have maybe considered leaving the position on, as an eventual loss wouldn't bother me too much. But, being barely up for the year (+6.51% after this close), I really can't afford to let this one become anything other than a winner.

$1,850 profit on a max Risk of $17,800. A 10.4% return on risk in 35 days.

Check out 2016 Track Record

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