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Friday, February 24, 2017

April SPX Unbalanced Iron Condor

Today I initiated an April 2017 Unbalanced Iron Condor in SPX:

Trade details:

BUY  40 April SPX 2175 Put @7.28
SELL 40 April SPX 2180 Put @7.52
SELL 20 April SPX 2455 Call @3.86
BUY  20 April SPX 2460 Call @3.34

Total  Credit received: $2,000 (0.52 from Calls * 20 + 0.24 from Puts * 40)
Days to expiration: 56

I made  a mistake with this order entry.  Typically on 5-point wide spreads I would expect 0.50 credit from the Call side and 0.30 from the Put side. If you add both, that is 0.80 Credit in a typical (balanced) Iron Condor. That was the credit I requested. I was surprised to get filled immediately as these trades usually take some time to get executed. My mistake was that this is an Unbalanced Position and so the requested credit must be different at order entry. Because the ratio of Puts to Calls is 2 to 1, the requested credit should have been 0.30 * 2 + 0.50 * 1 = 1.10 instead of 0.80 which is what I would have sent the order for in the case of a balanced Iron Condor. Had I sent a credit request of 1.10 it would have taken longer to get filled. Perhaps with this low volatility environment I would have had to modify the order to 1.05, but chances are I would have done better than $2,000. Well, it happens. Just a reminder to pay attention next time. I just lament that 0.24 credit on the Puts. Damn.

An SPX chart for future reference and self-study:
(Click on image to enlarge)

Trade Update - March 13, 2017

Following the weekend plan:

Closed 20 April SPX 2455/2460 Credit Call spreads @0.40 debit
Original credit received was 0.52, so this is a small 0.12 net gain ($240).
Put side still in play

I may reload the Call side on an SPX rally but at higher strike prices. Maybe 2470 or so.

Trade Update - April 21, 2017

Apr SPX 2180/2175 Credit Put spread expires for max profit

Original credit received was 0.24. In 40 spreads this is a $960 gain.
Combined with the $240 gain from the Call side, the Unbalanced Iron Condor resulted in a $1,200 profit before commissions

Check out 2017 Track Record 

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