***Closed***SPY iron condor initiated on 29 Dec 2009
6 Jan 2010: Close Trade
SPY (Standard & Poors Dep Rec) Iron Condor initiated on 29 Dec 2009
Trade Type: Low Probability, High Reward Iron Condor
Trade Summary
6 Jan 2010
SPY at 113.65 (+0.03)
9 days to expiration
Action: Close trade
Buy to close SPY Jan’10 114 Call
Sell to close SPY Jan’10 116 Call
Buy to close SPY Jan’10 111 Put
Sell to close SPY Jan’10 109 Put
For a net price of $0.87-0.88 debit or better.
Profit or Loss: +$12 per entry
Analysis
We decided to close this trade earlier than expected because the market seems to be heading upwards without any pause. If the market goes the way it goes for the next few days, this trade will be more likely to be a loser. It is the beginning of the year, volume is still light since many traders are not back from their holidays.We decided to close this trade for now and take a step back to analyze the market for our next trades. Better be safe than sorry. We’re not sure what to expect for 2010 but from what we can see now is a lot of uncertainty.
Good trading,
Gary
*****Trade History*****
29 Dec 2009: Initiate Trade
SPY (Standard & Poors Dep Rec) Iron Condor initiated on 29 Dec 2009
Trade Type: Low Probability, High Reward Iron Condor
Trade Summary
29 Dec 2009
SPY at 112.72 (-0.01)
17 days to expiration
Action: Sell a new iron condor for Jan expiration.
Sell to open SPY Jan’10 114 Call
Buy to open SPY Jan’10 116 Call
Sell to open SPY Jan’10 111 Put
Buy to open SPY Jan’10 109 Put
For a net price of $1.00 credit or better.
Net margin required: $100 per entry
Analysis
This is only our second trade for Jan 2010. Trading volume has been really low due to the holiday season. Most traders are not trading during period. As such, we have no choice but to give up our RUT trade for this month. We simply can’t get filled!
In any case, we managed to find a pretty good trade with the SPY. For this iron condor, we’re risking “even money”, which means we’re risking $1 for $1.
As you can see from the P&L chart below, our breakeven points are 115 on the upside and 110 on the downside with a probability of about 38% of success.
SPY iron condor
With only 17 days to expiration, we’re hoping to make this a quick trade and close it as soon as we can lock in a decent profit. We’ll inform you accordingly when the time comes for a closure or adjustment.
Good trading and happy holidays!
Gary
