IWM (iShares Trust Russell 2000) Iron Condor initiated on 2 Jul 2007
Entered 5 positions to mock account. Profit or Loss: +$70.
20 Jul 2007
IWM (iShares Trust Russell 2000) Iron Condor initiated on 2 Jul 2007
Trade Summary
IWM at 83.35
0 days to Jul expiration.
Do nothing. Let remaining options:
Short IWM Jul 81Put
Long IWM Jul 79 Put
expire worthless.
Profit or Loss: +$14 per position.
Percentage Profit: [14/115 X 100%] = 12.17%
Trade Analysis
We are not going to buy back the put spread to close this position to save on commissions. With only about 2 hours more to the close of today’s trading, we believe that it is very unlikely that IWM will close below 79.00.
We could have made $85 per trade for this position if we hadn’t closed the call spread on 13 Jul. Everything is 20/20 on hindsight. We did what we planned to do when we intiated this trade. We controlled our risk and then the risk disappeared. The good news is that we still managed to profit from this trade, albeit a tiny profit.
If you had entered 10 positions for this advisory, you would have made $140 profit using $1150. It could have been more, I know (argh!). Well, a profit is a profit. How ever much profit you have made for this advisory, you will be charged $12.17 only for this advisory. Good deal!
Good trade,
Gary
**********Trade History**********
13 Jul 2007
IWM (iShares Trust Russell 2000) Iron Condor initiated on 2 Jul 2007
Trade Summary
IWM at 85.1
6 days to Jul expiration.
Buy IWM Jul 85 Call
Sell IWM Jul 87 Call
(Enter as vertical spread)
For a net price of $0.70 Debit or less.
Trade Analysis
We decided to take all our risk off the table at this moment to protect whatever profit we have. The bullish sentiments in the market may push IWM higher in the next few days. All we need is gap up on next week and this position will become a loser. Since it is still showing a tiny profit now, we feel that we should eliminate all possible upside risk now.
We will most probably leave the put spread untouch and let it expires worthless next week to save on commissions.
We will continue to monitor this position.
Good trading,
Gary
**********Trade History*********
2 Jul 2007
IWM (iShares Trust Russell 2000) Iron Condor initiated on 2 Jul 2007
Trade Summary
IWM at 83.9
18 days to Jul expiration.
Sell IWM Jul 85 Call
Buy IWM Jul 87 Call
Sell IWM Jul 81Put
Buy IWM Jul 79 Put
For a net price of $0.85 Credit or better.
Total margin required: $115 per trade.
Trade Analysis
With only 18 days to July expiration, we believe this iron condor gives us a good chance of profit. We are risking $115 to make $85 per trade. Not a perfect 1-1 risk/reward ratio but a rather close alternative. We have very little time premium to sell with only 18 days but we expect the time value to erode away very rapidly in the coming weeks.
We also don’t believe that the IWM close above $85 in such a short time. Its recent high of 84.6 on 4 June 2007 will present itself as a resistance to any upmove. Our breakeven points for this condor is 85.85 on the upside and 80.15 for the downside. That gives us a range of about 5.7 points for IWM to wiggle around for the next 18 days. We have about 50% chance of success for this trade. Below is the risk profile of this trade.
We’ll be in touch when it is time to close up this trade.
Good trading,
Gary
Founder, Head Trader of MarketNeutralOptions
www.MarketNeutralOptions.com
Please note: All MarketNeutralOptions Advisory emails are price sensitive. Therefore, all recommendations, unless otherwise noted, are applicable for ‘DAY’ orders only, not good-till-cancelled. If a recommendation cannot be filled, we may choose to resend the email the following day along with any modifications.
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