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Ironcondor

Citigroup Short July Iron Condor w/ sideways channelCitibank has been trading within a horizontal range and sideways channel between 65.50 and 69 for the past fourteen trading days. Because of this, we are shorting the iron condor by writing the 69 calls and 65.5 puts for the initial strangle, and going half a dollar out on each side to acquire the protection (longing the 69.5 calls and 65 puts), thus turning the strangle into an iron condor. Being slightly below the money, it is somewhat bearish but created such that it aligns with the historical channel. By using the July 5th options, which are eight trading days away, we expect Citi to stay within the channel. This trade is done for a max profit of 30 and a max loss of 20 because the credit is .30/contract. This gives us break-evens of 65.2 and 69.3, and a better risk reward ratio (30/20) is received when the trade is done with calls instead of puts (29/21). This maximizes profit potential.
NYSE:C
by LaurenTrading
4
$MCD 7/5 Short Iron Condor: profit [201.03, 206.47], LIMIT RISKThis nearly ATM July 5th IC on McDonald's is technically driven. For the past 10 trading days, MCD's open and closes have both stayed within the parallel channel range of 203.73 and 206.16. With a great risk/reward ratio, we are entering into a short iron condor on the July 5th contracts, 8 trading days away, with a maximum profit of 147 with a mere, limited max loss of 103, per contract. This spread is constructed by taking a long position in the 207.5 calls and 200 puts, while simultaneously writing the 205 calls and 202.5 puts. Being an iron condor, we will collect the theta premium as maturity nears. This trade is done for a credit of 1.47, so there is a profit between 201.03 and 206.47. Technical indicators buttress our neutral sentiment, as the MACD has been extremely close to zero over the past two weeks, the DI+ and DI- components of the DMI are very close to each other (within 26.5 and 27, respectively), the ADX reads an extremely low 14, the Stochastics read 50.5 and the RSI and MFI are both within the range of .
NYSE:MCD
by LaurenTrading
OPENING: RUT JULY 19TH 1415/1420/1600/1605 IRON CONDOR... for a 1.78/contract credit. Metrics: Max Profit: $178/contract Max Loss: $328/contract Break Evens: 1418.25/1601.75 Delta/Theta: -.73/2.21 Notes: Squeezing in a little more RUT in the July cycle and collecting greater than one-third the width of the wings. Will look to roll in untested side on approaching worthless or on side test and take profit at 50% max. And now that I've got more than one setup on, can look to mix and match profitable call side with profitable put side to take off risk should that present itself. * Strikes in idea title are correct; text on horizontals is not ... .
TVC:RUT
by NaughtyPines
OPENING: RUT SEPT 20TH 1350/1360/1640/1650 IRON CONDOR... for a 2.90 credit. Metrics: Max Profit: $290/contract Max Loss: $710/contract Break Evens: 1357.10/1642.90 Delta/Theta: -1.01/2.20 Notes: A wider, longer-dated setup camped out at the 16 delta strikes for the expiry for the (ordinarily) sleepy summer months. I'm collecting a little less than my usual one-third the width of the strikes, but wanted more room to be wrong given the duration. Here, I'll look to roll in sides to delta balance as I would with any shorter duration setup, collect additional credit in the process, and shoot for bailing at 50% max.
TVC:RUT
by NaughtyPines
OPENING: QQQ JULY 19TH 165/168/192/195 IRON CONDOR... for a .98 credit. Metrics: Max Profit: $98/contract Max Loss: $202/contract Break Evens: 167.02/192.98 Delta/Theta: -3.59/1.24 Notes: Keeping things simple ... . Rotating into broad market in the July cycle and selling premium in the underlying with the highest background implied out of SPY, IWM, QQQ, and DIA. Collecting nearly one-third the width of the wings and will look to manage intratrade by rolling the untested side toward current price on side approaching worthless with a profit target of 50% of max (one-half of .98 or .49/$49). Would've gone with a weekly nearest 45 days 'til expiration, but only the June quarterly (38 days) and the July monthly (59 days) were available, so went with the monthly.
NASDAQ:QQQ
by NaughtyPines
3
OPENING: SPY JUNE 28TH 271/274/296/299 IC; 274/296 STRANGLE... for a 1.02/contract credit (the short strangle -- for 3.43). Metrics (Iron Condor): Max Profit: $102/contract Max Loss: $198/contract Break Evens: 272.98/297.02 Delta/Theta: -3.86/1.61 Notes: A late post, as these were opened on Friday -- the iron condor in a smaller account where buying power is limited; the short strangle in an account where that is less of a concern. I used the quarterlies, since the June monthly was a bit closer in time than I would ordinarily like and wanted to add in some Plain Jane broad market short premium without scrounging around for plays in less liquid underlyings or in the exchange-traded funds that had high implied but in which I already have plays (XOP, SMH, EWZ, XBI). As usual, will look to manage intra-trade on side test with untested side approaching worthless via rolling in of the untested and look to take profit at 50% max. Admittedly, the rank and background implied (24/16) isn't as high as I would like ... .
AMEX:SPY
by NaughtyPines
OPENING: RUT JULY 19TH 1440/1445/1625/1630 IRON CONDOR... for a 1.81/contract credit. Metrics: Max Profit: $181/contract Max Loss: $319/contract Break Evens: 1443.19/1626.81 Delta/Theta: -.81/1.82 Notes: Been a while since I've done any RUT. Collecting more than one-third the width of the wings with the shorties camped out around the 20 delta strike. Will roll the untested side on approaching worthless intratrade to bring in additional credit, improve break evens, and/or reduce max loss potential. Looking to take profit at 50% max (.90/$90).
TVC:RUT
by NaughtyPines
OPENING: EWZ JUNE 21ST 34.5/37.5/44/47 IRON CONDOR... for a 1.04/contract credit. With implied volatility fairly low across the board, going small, defined in the exchange-traded fund with the highest background implied volatility on the board (30.9%) to keep powder dry for something sexier to come along ... . Shorts nearest the 25 delta strike, longs nearest the 10 with slightly more than one-third the width of the wings collected. Shooting for that ol' 50% max. Go 37.5/44 short strange in June, and you'll collect 1.60 or so. Metrics: Max Profit: 1.04 ($104)/contract Max Loss: 1.96 ($196/contract) Break Evens: 36.46/45.04 Delta/Theta: -2.36/1.18
AMEX:EWZ
by NaughtyPines
OPENING: SMH JUNE 21ST 107/110/126/129 IRON CONDOR... for a 1.09/contract credit. Another premium selling play, small, defined in the semicon exchange-traded fund with implied volatility at nearly twice that of the broad market ... . Collecting slightly greater than one-third the width of the wings. Will look to take profit at 50% max. The naked 110/126 short strangle in the June cycle is currently paying 2.78. Metrics: Max Profit: $109/contract Max Loss/Buying Power Effect: $191 Break Evens: 108.91/127.09 Delta/Theta: -2.39/1.19
S
by NaughtyPines
THE WEEK AHEAD: TWTR EARNINGS, EWZTWTR (41/54) announces earnings on Tuesday before market open; pictured here is a May 17th 30/39 short strangle. Metrics: Max Loss/Buying Power Effect: Undefined/3.50/contract Max Profit: 1.09 Break Evens: 28.91/40.09 Delta/Theta: -3.99/4.92 Front Week to May Opex Volatility Differential: 41.5% Notes: Look to put a play on in the waning hours of the Monday session, adjusting the strikes to reflect any movement in the underlying if necessary. For those of a defined risk bent, the May 17th 27/31/38/42 iron condor is paying 1.13 with a buying power effect of 2.87, break evens of 29.87/39.13, and delta/theta of -1.24/2.9. It isn't quite what I like to see out of these (one-third the width of the widest wing in credit). By going slightly wider, you give up some credit at the door while increasing probability of profit. On the exchange-traded fund front, not much is rocking. Moreover, we're still in between cycles for me, with May opex being too short in duration and June being a touch long. As with last week, I'm looking to put something on in EWZ (14/30), since I don't have anything on at the moment, but have really just been waiting for June to get closer in time: the June 21st 36/44.5 short strangle is paying 1.23 with a buying power effect of about 4.10/contract, break evens at 34.77/45.73, and delta/theta metrics of -2.1/2.35. It's a little wider than I usually like to go (~25 deltas), but if I'm going to but it on early in the cycle, I want a little more room to adjust if necessary. The standard 25/10 iron condor in the June cycle is the 34/37/44/47, which is paying 1.02 with a buying power effect of 1.98, break evens of 35.98/45.02, and delta/theta of -2.05/1.07.
NYSE:TWTR
by NaughtyPines