***Closed***IWM Iron Condor initiated on 29 Apr 2010
29 Apr 2010: Initiate Trade
IWM (iShares Trust Russell 2000 ETF) Iron Condor initiated on 29 April 2010
Trade Type: Low Probability, High Reward Iron Condor
Trade Summary
29 Apr 2010
IWM at 73.52 (+1.25)
22 days to expiration
Action: Sell a new iron condor for May expiration.
Sell to open IWM May 75 Call
Buy to open IWM May 77 Call
Sell to open IWM May 72 Put
Buy to open IWM May 70 Put
For a net price of $0.90-0.91 credit or better. [All TOS autotrade participants were filled at $0.90.]
Net margin required: $110 per entry
Analysis
This is our third trade for May. The breakeven points for this iron condor is 75.9 on the upside and 71.1 on the downside. Currently we have about 41.79% probability of success. As long as IWM trades between these 4.8 points (48 RUT points), we should have a pretty decent profit.
Each entry has -4.91 delta. Since we’re risking about $110 to make $90, we have a risk/reward ratio (R3) of 1.22. We can afford to be more partient with this trade for it to become profitable.
That’s all for now.
Good trading,
Gary
