ROLLING IUX/RUT APRIL 15TH 1075/1085/1105/1120 IC
Updated
... to April 15th 1060/1080/1110/1135 iron condor.
The short put side and short call sides were rolled separately: the put side for a .48 credit and the call side for a .59 credit.
Notes: I widened the spreads on both sides here (rolling the short call up and the short put down) to increase the probability that I will be able to exit either one or both sides at or near max profit some time prior to expiration. A word of caution is in order: widening the spread increases the profit potential of the spread, but it also increases max loss. As a general matter, I only use widening as a last resort in rolling where I simply cannot get enough credit from the sale of an oppositional side to offset the roll of the tested side adequately. Here, I'm doing it largely for practical reasons: first, I want to insure that at least one side is not "too close for comfort" such that I have to roll both sides out (i.e., I want to be able to close at least one side for near max profit); second, I may not be able to watch the setup attentively next week to be able to take advantage of a short-term move ... .
The short put side and short call sides were rolled separately: the put side for a .48 credit and the call side for a .59 credit.
Notes: I widened the spreads on both sides here (rolling the short call up and the short put down) to increase the probability that I will be able to exit either one or both sides at or near max profit some time prior to expiration. A word of caution is in order: widening the spread increases the profit potential of the spread, but it also increases max loss. As a general matter, I only use widening as a last resort in rolling where I simply cannot get enough credit from the sale of an oppositional side to offset the roll of the tested side adequately. Here, I'm doing it largely for practical reasons: first, I want to insure that at least one side is not "too close for comfort" such that I have to roll both sides out (i.e., I want to be able to close at least one side for near max profit); second, I may not be able to watch the setup attentively next week to be able to take advantage of a short-term move ... .
Note
As a side note, the cost of the short put side is currently $228, the short call side, $719. So the preference would naturally be able to close that juicy short call side for at or near max profit. However, with price dancing $6 below that strike, I'm not sure that's going to happen by expiration ... . Hope springs eternal, which is why I set up GTC orders to close either side for a $20 debit.Note
Bought to cover 1110/1135 short call vertical side of this setup for $131 debit. The side was worth a $719 credit, so $719-$131=588/contract profit. Still watching the short put side with a few days left until expiry ... .Note
I ordinarily don't like to wait until the last minute with making a roll decision. However, since this is the only setup I have in this week's expiration, I figured I'd wait until the last minute, particularly since IUX/RUT has been staying clear of that 1080 strike for several days.Note
That was quick ... . Out of the short put side at around 50% max for that side -- a $108 debit. It was worth a $228 credit, so that's 120/contract profit on that side (minus fees and commissions). Thank you, gamma ... .Note
As a final note: I would note that closing this setup out for a 700/contract profit or so isn't as "sexy" as it looks, since it was not an "original" setup. It involved a couple of rolls that I got credits for, but when you roll an underwater side, you realize a loss for that, so it's important to paw through your trade chain from beginning to end, making sure that you're exiting profitably or at least for less of a loss than you would have experienced were to have just shut the whole thing down ... . Otherwise, you may be exiting the current setup profitably but not net profitable for the original setup plus any rolls you've done ... . In this particular case (and without posting the entire, drawn out trade chain), I netted something in excess of what my profit target for the original setup was, which was far less "sexy" ... .
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