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BookingAlpha Option Trading Advisory

Thursday, December 22, 2016

February 2017 RUT Unbalanced Iron Condor

Today I initiated a February 2017 Unbalanced Iron Condor in RUT:

Trade details:

BUY  20 February RUT 1200 Put @5.64
SELL 20 February RUT 1210 Put @6.30
SELL 10 February RUT 1470 Call @3.59
BUY  10 February RUT 1480 Call @2.78

Total  Credit received: $2,130 (0.81 from Calls * 10 + 0.66 from Puts * 20)
Days to expiration: 57

I usually receive more credit than this, but in such a low volatility environment there is just no other alternative than to reduce our returns expectations. Speaking of low volatility. The VIX is still in the 11's and RUT is still uncomfortably far from its main moving averages. I thought it was a good idea to add some long Put exposure:

BUY 2 February IWM 126 Put @1.28
Total debit invested: $256

This is the risk profile of both positions combined:
(Click on image to enlarge)

An End-of-Day RUT chart for future reference and self-study:
(Click on image to enlarge)

Trade Update - January 20, 2017

GTC Order to close the Unbalanced Iron Condor for 0.53 debit is triggered. Net gain: $1,600
75% of the Max profit was achieved in 29 days with 28 days before expiration.

The IWM 126 Puts are still in play and will be closed on Monday 

Trade Update - January 23, 2017

Closed the IWM 126 Puts for 0.42 credit. Originally purchased as downside protection at 1.28 debit.
Net loss is 0.86 per contract, in two contracts and dollar terms that is -$172

The entire position is now closed.

Check out 2016 Track Record 

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