14 Nov 2007

IWM (iShares Trust Russell 2000 ETF) Iron Condor initiated on 23 Oct 2007

Trade Summary

IWM at 78.39 (-0.055)
1 days to Nov expiration.

Buy IWM Nov 78 Put
Sell IWM Nov 76 Put

For a net price of $0.48-0.50 Debit or better. Thinkorswim auto-trade participants were filled at $0.50 debit.
Profit or Loss: +$41 per position.
Percentage Profit: +37.61% [41/109 X 100%]

Trade Analysis

Similar to the SPY iron condor that we just closed, we have been waiting for a good chance to close this put spread. We are very pleased that we are able to make some profit despite the volatile market. This IWM iron condor advisory makes $41 for every position you enter. It made a good 37.61% return for a short 22 days. This iron condor will cost our subscribers $37.61 regardless of how many positions they had in their account.

After we closed the put spread, we are now holding on to the open call spread of short Nov 84 call and long Nov 86 call. With the IWM currently trading at 78-ish, it is highly unlikely that this call spread will be worth much in the coming days. We will most probably let the call options expire worthless on Friday.

We are currently stalking a few potential short-term iron condor set up for December. We’ll fire out the advisories as soon as we get filled at our target price. Watch out for them!

Good trading,

Gary

*****************Trade History*******************

23 Oct 2007

IWM (iShares Trust Russell 2000 ETF) Iron Condor initiated on 23 Oct 2007

Trade Summary

IWM at 80.91 (+0.15)
23 days to Nov expiration.

Sell IWM Nov 84 Call
Buy IWM Nov 86 Call
Sell IWM Nov 78 Put
Buy IWM Nov 76 Put

For a net price of $0.91 Credit or better.
Total margin required: $109 per position.

Trade Analysis

This is a short term iron condor with only 23 days of theta. We are able to collect a decent premium for this condor largely due to the increase in volatility. We expect volatility to remain high as the market is at the mercy of earnings reports. Of course, next week we have the much-anticipated FOMC meeting which will no doubt provide some wild movements after the announcement.

This is a high-risk, high-reward iron condor. Specifically, we are risking $109 to make $91 with each position. We haven’t been very successful with these 1:1 risk/reward ratio iron condor lately largely due to the tendency of markets making massive moves in a day. But all we really need is to have more than 51% of these 1:1 iron condors to work in the long run to be profitable.

This iron condor is complementary to the other IWM iron condor that we put up on 10 Oct but it can also be a good condor by itself. This iron condor has a delta of -4.43 and has a probability of about 50.4%. Our breakeven points are at 84.91 on the upside and 77.09 on the downside. This iron condor has a profitable range of about 8 IWM points, which can be closely translated into 80 RUT points. As long as IWM trades between these 8 points for the next 23 days, we should be able to have a winner.

The market is generally waiting for the FOMC meeting. Which way will we move? Looking at the rather wide profitable range we have for this iron condor, we should be pretty safe to certain extent. Remember that this is a 1:1 iron condor and considering the number of days we have to hold on to this trade, we believe this is a good set up with a good chance of success.

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.
*******Options involve risk and are not suitable for all investors. ********

14 Nov 2007

SPY (Standard & Poors Dep Rec) Iron Condor initiated on 17 Oct 2007

Trade Summary

SPY at 148.18 (+0.10)
1 day to Nov expiration.

Buy SPY Nov 148 Put
Sell SPY Nov 146 Put

For a net price of $0.62-0.63 Debit or better. Thinkorswim auto-trade participants were filled at $0.60 debit.
Profit or Loss: +$36 per position.
Percentage Profit: +35.29% [36/102 X 100%]

Trade Analysis

We have been waiting to close this trade for a long time. For the past few trading sessions, this put spread was ITM. We could have closed it at $1.00-$1.15 just a few days ago. In fact, this same spread was trading at $1.20 for a moment just yesterday. We almost wanted to close it then to minimize the loss. Fortunately, we decided to hold on our seat belts for 1 more day because the market breadth was positive throughout the day (see chart below). The chart on the left shows the intra-day (15 min) up volume versus down volume in the NYSE. Up volume is the green candles and down volume is in purple. On the right is the intra-day (15 min) SPX chart. While the SPX showed some indecision during the first half of the day, the market breadth decisively bullish.

Lo and behold, the market eventually rallied! While there were signs that the market will turn positive for a change yesterday, we didn’t anticipate the rally to be so uplifting to say the least, pun intended. We almost gave up hope of having this put spread OTM by expiration. But what a difference 1 more day or waiting made!

With the rally, both our put options became OTM and were drastically cheaper. We decided to take this opportunity to close up this trade to lock in our profit. We entered this trade on 17 Oct (28 days ago) for $0.98 credit. We closed the put spread today for $0.62. We locked in a profit of $36 per position you put up. If you had put up 10 positions, you’ll be up by $360 despite the turmoil in the market recently. That is a 35.29% profit, hence,this trade will cost our subscribers $35.29 for November.

Although this trade is not officially closed because we are still holding on to the call spread of short Nov 157 call and long Nov 159 call. With the SPY currently at 148-9, it is quite unlikely that this call spread will be worth much in the next 2 days. But of course we all know what difference 1 day can make. So we’ll still keep an eye on this spread. Chances are we can let it expire worthless come expiration Friday.

We hope we can find more of such trade for December.

Good trading,
Gary

********Trade History**********

17 Oct 2007

SPY (Standard & Poors Dep Rec) Iron Condor initiated on 17 Oct 2007

Trade Summary

SPY at 152.88 (-0.92)
29 days to Nov expiration.

Sell SPY Nov 157 Call
Buy SPY Nov 159 Call
Sell SPY Nov 148 Put
Buy SPY Nov 146 Put

For a net price of $0.98 Credit or better.
Total margin required: $102 per position.

Trade Analysis

We have 29 days for this iron condor. This condor is currently pretty neutral, with a delta of about -4.5. Our breakeven points are 157.98 on the upside and 147.02 on the downside. That is about 11 SPY points, which is roughly about 110 SPX points. As long as the SPX trades within these 110 points for the next 29 days, this condor is a winner. This iron condor offers us a 1:1 risk/reward ratio. We are risking $102 to make $98 for each position we have. The probability of success currently stands at roughly about 47.54%.

We have no idea how bad the current downturn will be. But on the technical side we do have some rather defined support and resistance levels. Immediate support can be found at the 151 level and the 149 level will be the secondary support. Prior highs from July will act as immediate resisntance while the recent multi-year high of 157 will act as the next resistance. As we all know, these technical analysis merely serve as a guide for expectation of how the market might behave. We will have another FOMC meeting on 31 Oct, what will happen after the announcement is anybody’s guess. Because this is a 1:1 condor, we have a better risk/reward ratio and therefore we can afford to wait till the market settles down before we decide on our next move. We hope to lock in some profit before the FOMC meeting.

We shall set a mental stop-loss at $1.20-$1.30. When this condor trades for around these prices, we’ll relook at the market and decide on our next move. We’ll keep an eye on this trade and inform you when there is a need for adjustment.

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.
*******Options involve risk and are not suitable for all investors. ********

16 Nov 2007

IWM (iShares Trust Russell 2000) Vertical Spread initiated on 10 Oct 2007

Trade Summary

IWM at 76.71 (-0.15)
0 days to Nov expiration.

Do Nothing. Let options expire worthless.

Profit or Loss: -$20 per position.

Trade Analysis

Do nothing and let remaining call options expire worthless at the end of the day. Our decision to buy back our put spread on 7 Nov (see below) and lock in a small loss of $20 per position. We could have lossed more if we didn’t do what we did to adjust. While this trade turned out to be a disappointment, we are glad that we suffer a small loss.

There will be no charge for this IWM iron condor advisory since it’s a loser.

Have a great weekend!
Gary

**********************************Trade History************************************

7 Nov 2007

IWM (iShares Trust Russell 2000) Vertical Spread initiated on 10 Oct 2007

Trade Summary

IWM at 79.00 (-0.97)
9 days to Nov expiration.

Buy IWM Nov 81 Put
Sell IWM Nov 79 Put

For a net price of $1.10 Debit or better.
Profit or Loss: -$20 per position.

Trade Analysis

With only 8 days to expiration and both put options ITM, risk is getting higher by the day that this condor will be a bigger loser than now. We collected a total of $0.90 credit for this iron condor and now we are buying it back at $1.10. We lose $0.20 per position.

As we approach Nov expiration, the price of this spread will increase as long as IWM stays under 81. Looking at the chart below, chances are low that IWM will trade above 81 any time soon. Furthermore, our breakeven for the downside is 80.1, looking at the chart again, we can see that IWM tested the 80 level twice during the past 3 trading sessions. The more a particular price acts as a resistance or support the better the resistance or support. As such, we feel that chances are not good that we can trade above 80 any time soon.

We will most probably leave the call spread alone and let it expire worthless next Friday to save on commissions. You can choose to close it and free up the margin for other trades.

We still have another IWM iron condor initiated on 23 Oct. We are keeping a close eye on that position and will inform you timely when we need to do something.

Good trading,

Gary

*********************Trade History**********************

12 Oct 2007

IWM (iShares Trust Russell 2000) Vertical Spread initiated on 10 Oct 2007

Trade Summary

IWM at 83.7 (+0.54)
34 days to Nov expiration.

Sell IWM Nov 87 Call
Buy IWM Nov 89 Call

For a net price of $0.50 Credit or better.
Total margin required: $110 per position.

Trade Analysis

What a difference two days made! After yesterday’s sell down we are more confident with the resistance level at 85. What made yesterday’s sell down more vicious was the corresponding increase in trading volume. This shows that institutional players such as the hedge funds and mutual funds are selling into strength.

By adding this call spread we now have a complete iron condor for this entire position. We entered the put side on 10 Oct for $0.40 credit and we enter the call side for $0.50 credit. We thus have this condor for a net $0.90 credit. This is a nearly 1:1 risk/reward iron condor. We are risking $110 to make $90 for each position we put up.

This iron condor has new breakeven points. Our upside breakeven is now at 87.9 while our downside breakeven is at 80.1. This is a nearly 8 IWM point-wide iron condor. By adding this call spread to complete the iron condor, we have effectively reduced our total risk from $160 per position to $110 per position.

We believe premiums will erode away quickly now that there are only 34 days left to expiration. We expect the market to be volatile in the coming weeks due to earnings reports and therefore we should not close our position when the market is running on emotions. We don’t want to be caught in a whipsaw.

However, we should be ready to close up or roll up our position when this condor is worth more than $1.20, which will result in about 30% loss. Due to the volatile market, we may not be able to find good trade set up for Nov taking into consideration that there are only 34 days left to Nov expiration.

We have a FOMC meeting between now and Nov expiration. How the market will react to the meeting is anybody’s guess. Hopefully, by then we’ll be able to close and lock in some profit so that we can avoid the market turbulence that so often follows a FOMC meeting.

We’ll be keeping a close eye on this condor and inform you accordingly to any more necessary adjustments.

Good trading,

Gary

***************Trade History******************

10 Oct 2007

IWM (iShares Trust Russell 2000) Vertical Spread initiated on 10 Oct 2007

Trade Summary

IWM at 88.73 (-0.46)
36 days to Nov expiration.

Sell IWM Nov 81 Put
Buy IWM Nov 79 Put

For a net price of $0.40 Credit or better.
Total margin required: $160 per position.

Trade Analysis

Once in a while we do put up some directional trades. The market takes a dive today after Boeing announced that delivery for its Dreamliner will be delayed. This news dragged the Dow down by more than 100 points. Again, we hear both sides of the market presenting their case. The bulls say today is a mere correction that we have seen once in a while. The bears say today is the beginning of the end of the bull run.

Normally we don’t really care who is more right than the other. But feeling the uncertainty in the market, we feel that we ought to be careful initiating new trades that will last through the next FOMC meeting.

This vertical put spread is half the iron condor we have in mind. However, this time we decided to leg in out spreads to widen our margin of error. We do see a resistance but we are not very confident with it after seeing how the market sliced through resistance and support so rapidly in recent times. We may or may not add in the call spread eventually. It all depends on the market condition at that point in time.

But based on what we can see today, we believe this vertical has a relatively good chance of being profitable.

This vertical put spread has a breakeven of 80.6 on the downside. At current level, we are about 3.5 points away from our breakeven. Looking at the P/L chart below, we can see that this position has a probability of success of nearly 70%.

We do see some support at the 83 and 81.5 levels. (See IWM daily below) We do want to watch out for IWM to test its resistance at 85. The IWM is close to its recent highs of 85. This was the reason why we decided to do a vertical rather than an iron condor for better yield. If IWM manages to breach the 85 mark with strength in the coming days, it wouldn’t make sense for us to add in a call spread to complete the iron condor. What we had in mind earlier was to sell a 87/89 call spread to make this trade an iron condor. We may still end up selling the same call spread eventually, but we think it’ll be prudent to wait and see for a while more.

Alright, this is not a 1:1 risk/reward trade and therefore we have to set out some defences to this trade. We should be ready to close up or roll this trade when IWM breaches the 81 level or when this spread cost more than $0.45. In times of uncertainty in the market, it pays to stay alert and ready to take flight away from danger. We’ll see how the market moves and update you accordingly then.

Till then, 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.
*******Options involve risk and are not suitable for all investors. ********

16 Nov 2007

RUT (Russell 2000 Index) Iron Condor initiated on 8 Oct 2007

Trade Summary

RUT at 771.48 (-0.16)
-1 days to Nov expiration.

Do Nothing. Let options expire worthless.

Profit or Loss: -$10 per position.

Trade Analysis

When we entered this iron condor on 8 Oct, RUT was trading at 838.94. That was a mere 37 days ago. Today RUT is trading at 771.48. That is a whopping 67.46 points down! Not many traders fare well for the last 4-5 week’s volatility. We are pretty fortunate to be able to come out clean for this iron condor trade. On hindsight, if we didn’t do the second adjustment on 8 Nov (see below), we would have made a profit of about $120 per position! That is a 15.38% percentage profit while many are losing their shirts on Wall Street! However, that was not to be. We did what we felt was a safe thing to do. Because we were risking more than what we could possibly make, we have to be extra careful even when there was a slight chance of a loss. A massive loss with this iron condor will easily wipe out many month’s gains. This RUT iron condor is the first RUT iron condor to suffer a loss since we started trading RUT iron condor in Jan 2007! I guess this current month’s loss of $10 per position should be forgiven.

There will be no charge for this RUT iron condor advisory since it’s a loser.

Have a great weekend!
Gary

*****************************Trade History*******************************

8 Nov 2007

RUT (Russell 2000 Index) Iron Condor initiated on 8 Oct 2007

Trade Summary

RUT at 765.17 (-10.79)
6 days to Nov expiration.

Buy RUT Nov 750 Put
Sell RUT Nov 740 Put
Sell RUT Nov 730 Put
Buy RUT Nov 720 Put

For a net price of $1.25-1.30 Debit or better.

Trade Analysis

Try to beat that odds! After our first adjustment to this iron condor on 23 Oct, we had a whopping 81% chance of a winner. Today, we have to adjust again and this iron condor becomes a loser. Don’t worry, the alien invasion hasn’t happen. Just rising oil prices, plunging dollar, credit crunch spreading into tech stocks, Fed discounting chance of another rate cut in December, geopolitical concerns, blah blah blah… How much bad news can the market take in a day?

We decided to do this adjustment because the RUT certainly seems capable of going lower in the coming days. While we do expect a bounce to happen soon, we do not take chance with a big condor like this one. Big because we are risking a lot more than what we can possibly make out of this trade. After the first round of adjustment, we were risking $880 to make $120 per position we put up.

As usual, we always set our alarm 30 points from our short options. We were short Nov 750 put. RUT breached 780 since yesterday. We have about a week more to expiration so we thought that we can afford to delay the adjustment to buy some time for a bounce to happen. It then breached 770… then 765, which is only 15 points from our short put.

For this adjustment, we are really redoing what we did on 23 Oct. We are buying back our put spread and selling another cheaper put spread for $1.25. Initially, we collected $2.20 credit for this condor, then on the 23 Oct adjustment, we gave back $1.00 to buy a higher probability of success. Today, we gave back another $1.25 to buy a ticket out of this trade. With only 6 days to expiration and a bounce on the horizon, there is a higher chance that we can get out of this trade with a small loss of $0.05 per position.

This would be a loser RUT iron condor for a long time. Considering how many traders are losing their shirts in the past 2 days, we are fortunate that our losses are thus far small. We believe that there should be only a very small chance that we’ll need to adjust again. Already we are locking in a small loss of $0.05 per position. Any more adjustment and we’ll have a bigger loss.

Some subscribers may ask: “Why don’t we just close up the trade and move one?” That is a good way out if you need to free up the margin for new trades. However, if we were to close up the entire position now, we will be locking in a loss far greater than the $0.05 loss if we simply do the adjustment.

What a market to trade! Well, still wishing you good trading!

Gary

******Trade History******

23 Oct 2007

RUT (Russell 2000 Index) Iron Condor initiated on 8 Oct 2007

Trade Summary

RUT at 812.13 (+2.00)
22 days to Nov expiration.

Buy RUT Nov 780 Put
Sell RUT Nov 770 Put
Sell RUT Nov 750 Put
Buy RUT Nov 740 Put

For a net price of $0.95-1.05 Debit or better.

Trade Analysis

As I mentioned in the update yesterday, we were trying to adjust this RUT iron condor since yesterday. And we finally got it filled at the target price we want. RUT is such a pain to trade isn’t it. This adjustment wasn’t an easy decision. Yes, RUT did breached our alarm level of 810 from the plunge we saw last Friday and we should be watchful and be ready to adjust.

However, the market rebounded yesterday, albeit without supporting high volume. Today, the market in general seems to shrug off the massive bearishness we saw last Friday. There were a couple of times we actually cancelled the this order while we waited for it to be filled just to reenter it again a few minutes later. We are at the precise point between to adjust or not to adjust. Of course, the effect of either decision is obvious. To adjust, we will reduce the credit we collected, which means we will have a lower profit for this trade, which in turns means we are increasing our potential risk. But all these in exchange for a higher probability of success. On the flip side, if we were to remain status quo, we will be at a very uncomfortable position because the RUT is simply too near our short put-a mere 30 points away. We will have higher profit but lower probability of success. Furthermore, if RUT were to fall in the coming days to the same magnitude last Friday, the put spread will become a lot more expensive due to the rise in IV.

Looking at the way the RUT ‘rallied’ today, we decided that we will sleep better if we do the adjustment. The street is expecting another round of rates cut next week. Following the cut, it won’t be surprising that the market will rally. If this were to happen, then it will make this adjustment look silly. We decided to stick to the safer side by making the adjustment. We are really buying back our 780/770 put spread and selling another 750/740 put spread. Since the 780/770 spread that we are buying cost more than the 750/740 spread, we ended up paying $1.00 for each position we have. This effectively reduces our potential profit to $120 per position from $220.

But look on the bright side! Take a look at this:

Our probability of success is now widened to 81.16%, more than the 68% that we always try to shoot for. Seems certain that we can profit with this trade short of some unexpected events such as an alien invasion! Our new breakeven points are now at 901.2 on the upside and 748.8 on the downside. As long as RUT trades between this range, which is so wide, we should have a winner.

Well, we may not be done with this trade as it is. I believe many subscribers will agree with me that the belief that RUT will hit 900 in the next 23 days is a little short of ridiculous. As such, we may try to recoup some of our lost premium by rolling down the call spread. By rolling down the call spread, we can collect a bit more premium. Currently, our 900/910 call spread is trading at $0.20, which is not providing us with any hedge. However, we have to be careful with the call side adjustment taking into consideration the FOMC meeting next week.

Well, we’ll be in touch when the time is right to do such an adjustment.

Good trading,

Gary

****************************Trade History****************************

9 Oct 2007

Just a quick note. Subscribers with auto-trade arrangement with thinkorswim were not filled yesterday. We are trying to get it filled at the moment. If you have auto-trade arrangement with thinkorswim, there is no need for you to do anything on your own. If your account doesn’t have this position now, you may wish to know that thinkorswim is currently working on that for you. You can log into your thinkorswim account and go to the ‘monitor’ tab and check under ‘working order’ or ‘filled order’.

So far, about 1/3 of thinkorswim auto-trade subscribers are filled. It will be your turn next!

Good trading,
Gary

*********************Trade History*************************

8 Oct 2007

RUT (Russell 2000 Index) Iron Condor initiated on 8 Oct 2007

Trade Summary

RUT at 838.94
37 days to Nov expiration.

Sell RUT Nov 900 Call
Buy RUT Nov 910 Call
Sell RUT Nov 780 Put
Buy RUT Nov 770 Put

For a net price of $2.20-2.30 Credit or better.
Total margin required: $780.

Trade Analysis

This is our latest installment for our monthly RUT iron condor. This condor is very neutral at the moment with only -0.88 delta per position. We are risking $780 to make $220 for this trade with a probability of about 64.61% of success (see chart below).

Our breakeven points are 902.2 on the upside and 777.8 on the downside. At current price, our breakeven points are about 63 points away from the upside and about 61 points away from the downside. Although this condor doesn’t offer us a probability of success of 1 standard deviation (68%), we believe we’ve got a good trade at this moment. To achieve the 68% would have resulted in much lower premiums.

From the daily chart above, we can see that there is strong resistance at the 860 level, which is the prior highs. Similarly, we can see support at the 800 level. The Relative Strength Index indicator shows a high reading of about 70. A high RSI reading normally indicates a looming pullback. We believe there is a high chance that RUT will spend most of its time trading sideways for the coming weeks. However, as we all have grown to get used to, the market can make steep moves in either directions without warning.

As such, we have to set up our own warning system. Since our short options are 900 call and 780 put, we should be ready to take defensive actions such as roll or close when the RUT breaches the 870 and 810 levels. We always give ourselves a space/time of about 30 points to reassess the market conditions at that point in time before we decide on our adjustments. Of course, we hope that we never have to do any adjustment for this trade.

We’ll be in touch,

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.
*******Options involve risk and are not suitable for all investors. ********

6 Nov 2007
The Week Ahead

The Fed’s rate cut came and go and the market went up and then down. The mess in Merrill and Citi, rocketing oil prices, a weakened dollar, and what not have been pushing the market down. Markets hate uncertainty and it is certainly showing its displeasure. We have seen how volatile the market can get lately. Just yesterday, we lost 100 Dow points at the open, and then went up to positive territory in mid-day and finally closed the day only slightly lower. Barring any bad news, we should expect to see a bounce in the coming days. We are waiting for this bounce to happen so that we can close up some of our open positions.

Position update:

RUT iron condor initiated on 8 Oct

Short Nov 900 call
Long Nov 910 call
Short Nov 780 put
Long Nov 770 put

For $2.20 credit per position.

On 23 Oct, when RUT was trading near 810, we initiated a roll to our put spread in accordance to our trading rules.

We bought back the put spread and sold another (short 750 put, long 740 put) for a net $1.00 debit.

We are now Short Nov 900 call, Long Nov 910 call, Short 750 put and long 740 put for a net $1.20 credit per position.

With the spike in Implied Volatility (IV), this condor is currently trading at $1.60, which indicates that this position is currently a loser of $0.40. Much of this is due to the heightened IV, which drove up the price of puts. Our short put of 750 is currently about 30 points away from the current price of RUT. It is now very unlikely that we will roll down our call spread to collect more premiums. With only about a week to go before Nov expiration, there is not much premiums we can collect anyway. We will watch close at the 770-780 level. Should the RUT falls below this range, we have to take action again. We will most probably close up the put spread should the need arises.

IWM iron condor initiated on 10 Oct

Short Nov 87 call
Long Nov 89 call
Short Nov 81 put
Long Nov 79 put

For $0.90 credit per position.

The put spread of this condor is currently ITM and the entire position is currently trading at $1.23, which means that we are facing a small loss of $0.33 per position. We will close the put spread when there is a bounce. If the bounce is substantiate, the value of the put spread will decrease dramatically because it has very little theta value left. We hope to get out even for this trade, or even a small profit.

SPY iron condor initiated on 17 Oct

Short Nov 157 call
Long Nov 159 call
Short Nov 148 put
Long Nov 146 put

For $0.98 credit per position.

This position is currently worth $0.55, which means that we are seeing a profit of $0.43 per position. As long as the SPY holds above 149, we should have a high chance of this trade being a winner. As of now, we don’t do anything to it and let the theta decay.

IWM iron condor initiated on 23 Oct

Short Nov 84 call
Long Nov 86 call
Short Nov 78 put
Long Nov 76 put

For $0.91 credit per position.

This position is currently trading at $0.76, which means that we are having a profit of $0.15 per position. Similar to the other IWM condor we have, we will try to close this trade as soon as possible when the bounce occur.

Out of the 4 iron condors that we have currently, 3 are 1:1 risk/reward condors (the last 3). With these condors we can wait out a little longer for a suitable chance to close up the trade, which is what we are doing now. We are waiting for the bounce to occur so that we can get out of some of these positions.

Subscribers will get the trade alert real-time when the time comes.

For now, take care in the market and good trading!

Gary