***Closed***SPY iron condor initiated on 23 June 2009
13 July 2009: Close trade
SPY (Standard & Poors Dep Rec) Iron Condor initiated on 23 June 2009
Trade Type: Low Probability, High Reward Iron Condor
Trade Summary
13 Jul 2009
SPY at 88.76 (+0.79)
4 days to expiration
Action: Close entire iron condor to lock in profit.
Buy to close SPY Jul 93 Call
Sell to close SPY Jul 95 Call
Buy to close SPY Jul 86 Put
Sell to close SPY Jul 84 Put
For a net price of $0.27-0.28 debit or better. [All TOS autotrade participants were filled at $0.28 debit.]
Profit or Loss: +$63 per entry.
Analysis
This iron condor is a short and sweet one (just 20 days old). With 4 days to go to expiration and the price so cheap, it is a good idea to close up the entire trade at this point before the market decides to move further up or down.
We initiated this trade on 23 June for $0.91 credit and closed it today for $0.28 debit netting us a profit of $63 per entry. On a margin of just $109 per entry, this trade made a profit of 57.8%!
We may have missed some good trades for July since we only have 2 trades for this month but so far the only 2 trades that we have are producing good results.
We will be looking for new trades for Aug in the coming days since we’ve now freed up our margin.
Good trading,
Gary
*****Trade History*****
23 June 2009: Initiated trade
SPY (Standard & Poors Dep Rec) Iron Condor initiated on 23 June 2009
Trade Type: Low Probability, High Reward Iron Condor
Trade Summary
23 June 2009
SPY at 89.33 (+0.07)
24 days to expiration
Action: Sell a new iron condor for July expiration.
Sell to open SPY Jul 93 Call
Buy to open SPY Jul 95 Call
Sell to open SPY Jul 86 Put
Buy to open SPY Jul 84 Put
For a net price of $0.91-0.92 credit or better. [All TOS autotrade participants were filled at $0.91 credit.]
Net margin required: $109 per entry
Analysis
This is our second trade for July. For this iron condor, we are risking $109 to make $91. This gives us a risk/reward ratio (R3) of about 1.2. Looking at the P&L chart below, this trade has a delta of -2.68 with about 47.71% of success.
Our breakeven points are 93.91 on the upside and 85.09 on the downside.
Because this is a low R3 trade, we can afford to wait a little longer for time decay to work its magic. As long as the SPY trades between 85 to 94, this trade will be a good trade with very good returns.
We will continue to keep a lookout for this trade and inform you accordingly.
Good trading,
Gary
