Today I entered the first position with February 2015 monthly options as we are getting close to 8 weeks away from that expiration cycle.
Here's the trade:
Buy 4 SPX February 1875 Put @8.45
Sell 4 SPX February 1880 Put @8.65
Sell 4 SPX February 2190 Call @4.35
Buy 4 SPX February 2195 Call @3.75
Credit received: 0.80 ($320 for 4 contracts per leg)
Max risk: 4.20 ($1680 for 4 contracts per leg)
Days to expiration: 58
I played the same number of options on the Call side as I did on the Put side. The reason for this is because I think 2190 would be a very extreme price for SPX to reach by February. The projection of the uptrend channel I drew points to 2160. Also the market is currently 3% above its 50 Day Moving Average which has proven to be close to extremes in the past. So I felt safe selling Calls up there and decided to be aggressive and not cut my Calls size in half, as I will do in other occasions.
A chart for future reference, a couple of hours after the trade was entered:
(Click on image to enlarge)
Positions after this trade:
January SPX 1820/1825 Credit Put Spread
$120 credit. 99% probability of success. 23 days to expiration.
February SPX 1875/1880/2190/2195 Iron Condor
$320 credit. 74% probability of success. 58 days to expiration.
No concerns so far with 2015 positions.
Check out 2015 Track Record
Related Articles:
Weekend Portfolio Analysis (January 3, 2015)
Weekend Portfolio Analysis (January 10, 2015)
Weekend Portfolio Analysis (January 17, 2015)
Weekend Portfolio Analysis (February 8, 2015)
Weekend Portfolio Analysis (February 14, 2015)
Here's the trade:
Buy 4 SPX February 1875 Put @8.45
Sell 4 SPX February 1880 Put @8.65
Sell 4 SPX February 2190 Call @4.35
Buy 4 SPX February 2195 Call @3.75
Credit received: 0.80 ($320 for 4 contracts per leg)
Max risk: 4.20 ($1680 for 4 contracts per leg)
Days to expiration: 58
I played the same number of options on the Call side as I did on the Put side. The reason for this is because I think 2190 would be a very extreme price for SPX to reach by February. The projection of the uptrend channel I drew points to 2160. Also the market is currently 3% above its 50 Day Moving Average which has proven to be close to extremes in the past. So I felt safe selling Calls up there and decided to be aggressive and not cut my Calls size in half, as I will do in other occasions.
A chart for future reference, a couple of hours after the trade was entered:
(Click on image to enlarge)
Positions after this trade:
January SPX 1820/1825 Credit Put Spread
$120 credit. 99% probability of success. 23 days to expiration.
February SPX 1875/1880/2190/2195 Iron Condor
$320 credit. 74% probability of success. 58 days to expiration.
No concerns so far with 2015 positions.
Check out 2015 Track Record
Related Articles:
Weekend Portfolio Analysis (January 3, 2015)
Weekend Portfolio Analysis (January 10, 2015)
Weekend Portfolio Analysis (January 17, 2015)
Weekend Portfolio Analysis (February 8, 2015)
Weekend Portfolio Analysis (February 14, 2015)
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I like this iron condor. It is hard to see the market going up another 100 points next 8 weeks unless something exceptional happens in the world economies. I can see us going down 100 points next month.
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