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BookingAlpha Option Trading Advisory

Thursday, April 21, 2016

August SPX unbalanced Iron Condor

25 point wide spreads on the August 31 SPX options were not available above 2250. The next strike price above that was 2300. So, I ended up going to regular monthly expiration options:


Trade Details:
Buy 20 SPX August 1750 Puts (@12.60)
Sell 20 SPX August 1760 Puts (@13.25)
Sell 14 SPX August 2250 Calls (@5.80)
Buy 14 SPX August 2260 Calls (@4.90)

Net Credit: 0.65 from Put spreads, 0.90 from Call spreads. Total $2,560
Max Risk: $17,440 to the downside, $11,440 to the upside.

SPX Chart at market close for future reference:
(Click on image to enlarge)

Trade Update - May 13, 2016
Buy to Close 14 SPX August 2250 Calls (@0.95)
Sell to Close 14 SPX August 2260 Calls (@0.75)
Net Debit 0.20

These Credit Call spreads had originally been sold for 0.90 credit (Read beginning of this page). Closing for 0.20 represents a net 0.70 gain per spread or 0.70 * 100 * 14 = $980 in dollar terms. We held this position for only 22 days, and almost 80% of the profit was achieved.

Put side still in play but healthy at the 10 delta mark.
Trade Update - June 30, 2016
Buy to Close 20 SPX August 1760 Puts (@3.45)
Sell to Close 20 SPX August 1750 Puts (@3.25)
Net Debit 0.25

These Credit Put spreads had originally been sold for 0.65 credit (Read beginning of this page). Closing for 0.25 represents a net 0.40 gain per spread or 0.40 * 100 * 20 = $800 in dollar terms. Combining the profits from the Call side, closed more than am onth earlier, the total profit was $1780.

 Check out 2016 Track Record


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