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Ironcondor

BOUGHT AMZN 552.5/557.5/617.5/622.5 TO CLOSEClosing out this fella here at 26% max profit ... . Wasn't my favorite kind of trade to put on (IVR wasn't high enough for me, frankly), so I'm taking what little money there is and running to free up buying power for approaching earnings. Nothing's worse than being in a trade you hated from the get go and then having it go sour on you ... . (Originally opened for a $96 credit; closed here for a $72 debit, so about $18 profit/contract, after all was said and done with fees and commissions).
NASDAQ:AMZN
by NaughtyPines
ROLLING IUX/RUT APRIL 15TH 1075/1085/1105/1120 IC... 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 ... .
I
by NaughtyPines
TRADE IDEA: MON APRIL 15TH 76.5/81/93.5/98 IRON CONDORMON announces earnings on Wednesday before market open, so look to put on your play on Tuesday in the waning hours and minutes of the NY session. As with all earnings plays, you may have to tweak your strikes somewhat, depending on how MON moves running into the end of the session. Here are the metrics for this defined risk setup: Probability of Profit: 69% Max Profit: $63/contract Buying Power Effect/Max Loss: $387/contract Alternatively, you can go short strangle: MON April 15th 81/93.5 short strangle Probability of Profit: 72% Max Profit/Buying Power Effect: $99/~$1140/contract Notes: Because we're just at the beginning of earnings season, I'm looking to manage my capital a bit more efficiently here and will probably use the iron condor because it's defined risk and the per contract buying power effect is easier to swallow than that of the short strangle ... . Additionally, the broad market is in a low volatility environment here, and I don't want to have a bunch of buying power tied up with earnings plays in the event we get a volatility pop such that I can wade back into 45 DTE index ETF setups.
M
by NaughtyPines
SOLD RUT/IUX APRIL 15TH 1075/1085 SHORT PUT VERTICALAfter buying back the short put vertical side of this short duration iron condor yesterday at 50% max, I'm resurrecting the short put side here to hedge against the possibility of further upside in the Russell. The setup is rather tight, with a scant 20 strikes between my short options, but the model is telling me that the 1075/1085 short put vert has a 70%+ probability of profit for that expiry, so that's what I'm mechanically going with. Filled for a 1.41 credit ($141/contract). I'll look to take the entire setup off in profit or the wings one at a time ... .
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by NaughtyPines
TRADING IDEA: LULU APRIL 8TH 54/68.5 SHORT STRANGLEI'm going to go with a nondirectional bias here (pretty much always do). Here are the metrics for both a run of the mill one standard deviation short strangle, as well as an iron condor: April 8th 54/68.5 short strangle Probability of Profit: 70% Max Profit: 1.30/contract ($130) Buying Power Effect/Max Risk: ~$616/undefined Break Evens: 55.30/67.20 April 15 50/54/68.5/72.5 iron condor Probability of Profit: 68% Max Profit: 1.00/contract ($100) Buying Power Effect/Max Risk: $301/contract Break Evens: 53.01/69.49 Notes: I had to go a touch farther out in time for the iron condor to get the long options strikes I wanted, but it'll still yield about $100/contract ... . Look to take either setup off at 50% max profit on the volatility contraction that is likely to occur post earnings.
NASDAQ:LULU
by NaughtyPines
1
SOLD TO OPEN APRIL 15TH RUT/IUX 1025/1035 SHORT PUT VERTAfter closing the short put wing yesterday for a small profit and rolling the short call wing up and out a week for an additional credit, I'm selling a 1025/1035 short put vertical in the same expiry as the rolled out call wing to complete an April 15th 1025/1035/1105/1120 iron condor. I'm still playing a little bit with the percentage of max profit to either take the whole setup off or an individual wing off. Ordinarily, I take off the entire setup as a unit at 50% max profit, but I regard these short term setups kind of like scalps, so have been taking them off at lower profit percentages (money, take, run ... ). Filled for a 1.21 ($121) credit ... .
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by NaughtyPines
SOLD RUT/IUX APRIL 8TH 1100/1110 SHORT CALL VERTICALAfter closing the short call wing of my original iron condor, I rolled out the short put wing down one strike and out one week to the April 8th expiry to give it a little more room and a little more time. I'm just matching that rolled out side with a new call wing to hedge, resulting in an April 8th 1050/1060/1100/1110 iron condor. Since I rolled out the short put size for a miniscule debit ($4), I'll look to take off the entire setup at 50% max profit or either side when it approaches near worthless ... .
I
by NaughtyPines
BOUGHT TO CLOSE RUT/IUX APRIL 1ST 1120/1130 SHORT CALL VERTWith this little down move here, I closed out the short call side of my RUT/IUX iron condor -- the April 1st 1120/1130 short call wing. The short call wing of the iron condor was worth approximately $166 in credit/contract when put on as part of the iron condor, and I closed it out today for a $40 debit, yielding a profit of about $126/contract for that side. To give the put side a little more time and room to work out, I rolled it out and down to the April 8th expiry for a $4 debit and will erect a new call wing in the April 8th expiry tomorrow ... .
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by NaughtyPines
APRIL 1ST RUT/IUX 1055/1065/1120/1130 IRON CONDORBack to short duration trades post-FOMC/post-Draghi ... . Metrics: Probability of Profit: 65% Max Profit: ~$260/contract Buying Power Effect: $729/contract, Defined Risk Notes: You will want to try to get a fill slightly above the mid with this instrument; I would shoot for .05 ($5) above the mid and see if you get a fill and then adjust the fill price if you don't. I've been looking to take these off at 25% max and move on ... .
I
by NaughtyPines
TRADE IDEA: NKE APRIL 1ST 60/70 SHORT STRANGLEHere are the metrics for the setup: Probability of Profit: 73% Max Profit: $100/contract Buying Power Effect/Risk: $846/contract; Undefined Risk Break Evens: 59/71 Alternative: April 15th 56.5/60/69/72.5 iron condor Probability of Profit: 61% Max Profit: $100/contract Buying Power Effect/Risk: $250/contract; Defined Risk Break Evens: 59/70 Notes: As you can see, there are pros and cons to the short strangle versus the iron condor. The short strangle has a higher probability of profit, but requires more buying power and the risk is undefined. The iron condor has a fairly nice defined risk buying power metric of $250/contract, but the probability of profit is less (and I had to go farther out in time in order to get decent long options; the longs in the April 1st expiration at basically the same strikes were "no bid" on one side or the other ... ). The break evens of both setups are nearly identical, however.
NYSE:NKE
by NaughtyPines
TRADE IDEA: SPY JUNE 17TH 177/181/215/219 IRON CONDORWhen volatility is low such as it is now in shorter term expiries, you have a couple of different choices when selling premium in broad-based market instruments like SPY, IWM, QQQ, and DIA: (a) sit on your hands, waiting for volatility to pop to a level such that less-than 45 DTE setups are more profitable; or (b) look farther out in time for volatility to "regularize" in more time-distant expiries. (Naturally, there is nothing to prevent you from continuing to put on premium selling setups in this environment, but they're subject to the vagaries of volatility expansion, which is the opposite of what you generally want when selling premium). In this particular case, I'm looking to keep setups in queue in the event that this lower volatility hangs about for several weeks and, after looking at the implied volatility for April, May, and June, have concluded that implied volatility in SPY options doesn't begin to "regularize" until the June expiry: April's IV is 17.2%; May's, 18.7%; and June's, 19.9%, after which the IV%-age pretty much hangs around the 20% area for the remainder of the year. Here's the setup: June 17th 177/181/215/219 Iron Condor Probability of Profit: 61% Max Profit: $104/contract Buying Power Effect: $296/contract Notes: Naturally, this is quite far out in time, and a lot of stuff can happen between now and then. Consequently, I like to keep these longer dated setups small relative to my 45 DTE and under setups, so that I don't have a ton of buying power tied up while I'm waiting for the statistical probabilities to play out.
AMEX:SPY
by NaughtyPines
SELLING GLD APRIL 15th 109/112/127/130 IRON CONDORTaking on a little bit of extra GLD risk here, primarily to finance the improvement of my short call side of my June 112/115/115/118 iron fly (using the .70 credit I hope to receive here to finance the roll of the 115/118 side of the iron fly to higher strikes (same expiry)). Here are the metrics for the setup: GLD April 15th 109/112/127/130 iron condor Probability of Profit: 66% Max Profit: $70/contract Buying Power Effect: $230/contract
AMEX:GLD
by NaughtyPines
BOUGHT TO CLOSE BIDU MAR 18TH 152.5/157.5/180/185 IRON CONDORClosed this setup at 50% max profit (for the rolled setup) ($62.58/contract). It doesn't entirely make up for my early bobble of BIDU's earnings announcement date (first they said it was 2/10; then it was 2/25), but I'll take it here going into Draghi/FOMC. Here's the entire chain: 2/25 Sold March 8th 132/137/177.5/182.5 iron condor for a $131 credit 2/26 Bought the 132/137 short put vert back for a $9 debit (post earnings announcement; near worthless) 2/29 Rolled the 177.5/182.5 short call vert to the March 18th 180/185 short call vertical for a $17 credit (price too close to short call strike with limited DTE) 2/29 Sold the March 18th 152.5/157.5 short put vertical for a $48 credit (this wasn't strictly necessary, since I received a credit for the roll of the short call side; I just wanted some protection there if price continued to shoot off into the ether). 3/9 Bought to close the March 18th 152.5/157.5/180/185 Iron Condor for a $106 debit. Total credits minus total debits minus fees and commissions = $62.58/contract, not quite 50% max profit of the original setup, but close enough considering that I had to roll and that it was supposed to be one of those ideal "inzee/outzee" earnings plays ... .
NASDAQ:BIDU
by NaughtyPines
BOUGHT TO CLOSE MAR 18TH QQQ 99/102/107/110 IRON CONDORTaking some risk off the table while I can ... . This was part of a layered on arrangement I had in QQQ in the March expiry, much as I did with SPY. Here's the trade chain from head to toe: 2/2 Sold March 18th QQQ 94/97/109/112 iron condor for a $110 credit 2/2 Sold March 18th QQQ 93/96/108/111 iron condor for a $112 credit (Don't ask me why I sold two setups the same day; I imagine there was somewhat of a large move that particular day such that selling a second setup made sense). 2/4 Sold March 18th 92/95 short put vertical for a $56 credit (sold on weakness) 2/5 Bought to close March 18th 109/112 short call vertical for a $16 debit (bought back on weakness/spread near worthless). 2/5 Bought to close March 18th 108/111 short call vertical for a $22 debit (bought back on weakness; spread near worthless). 2/16 Sold March 18th 106/109 short call vertical for a $41 credit (sold on strength) 2/17 Sold March 18th 107/110 short call vertical for a $49 credit (sold on strength) 2/22 Bought to close March 18th 92/95 short put vertical for a $26 debit (bought back on strength; spread near worthless) 3/1 Bought to close March 18th 93/96 short put vertical for a $9 debit (bought back on strength; spread near worthless) 3/2 Bought to close March 18th 94/97 short put vertical for a $10 debit (bought back on strength; spread near worthless) I should have bought to close here, as the "chain" was net in profit, but forgot to check when I was doing my Tuesday housekeeping trades. 3/7 Rolled the March 18th 106/109 short call spread to the 107/110 spread (same expiry) to merge the 106/109 with an existing 107/110 for a $34 debit 3/7 Sold March 18th 99/102 short put spread to finance the cost of the roll for a $74 credit 3/8 Bought to close March 18th 99/102/107/110 iron condor for a $176 debit I'm not going to do all the math here, but if you add up all the credits and subtract all the debits, the net profit after fees and commissions is about $100/contract ($99.89, to be exact), which is a little less than 50% max profit for the combination of the two original iron condors ... .
NASDAQ:QQQ
by NaughtyPines
2
NDX/IUXX MAR 11TH 4190/4200/4420/4430 IRON CONDORAnother thing I'm going to do while waiting for volatility to return in the broader markets such that it makes sense to set up plays 45 days out is go short duration. While I'm not going to put this particular trade on because I have a short duration RUT/IUX iron condor that I rolled out to next week standing in as this week's short duration play (see Post below), at some point I figured I'd putz with the "big daddy of the indices" -- IUXX or NDX (RUT/IUX is the smallest, followed by SPX/SPX500, followed by NDX/IUXX). Here's a basic setup: NDX/IUXX Mar 11th 4190/4200/4420/4430 Iron Condor Probability of Profit: 63% Max Profit: $335/contract Buying Power Effect: $665/contract Notes: Like RUT or SPX plays, this is one that you want to fiddle with getting a fill above the mid price, since price can swing back and forth across that by +/- .20 given the wide bid/ask due to the price of the underlying. Hey $20 is $20 and if you're going 2 or 3 contracts or more, that little .20 swing can add up and be significant. I generally set price .10-.20 above the mid, see if it gets filled, wait a bit, adjust price slightly, etc. As with all iron condor setups, I look to take the play off as an entire unit if I can for 50% max profit or, if a single side is approaching worthless (.10 or less), I look to take that off first. In the event a side is breached, look to roll it out another week, improving strikes if possible, and selling an oppositional side against for at least a credit that exceeds the cost/debit to roll any tested side.
NASDAQ:NDX
by NaughtyPines