***Closed***RUT Iron Condor initiated on 22 June 2010
2 July 2010: Close put spread
RUT (Russell 2000 Index) Iron Condor initiated on 22 June 2010
Trade Type: High Probability, Low Reward Iron Condor
Trade Summary
2 Jul 2010
RUT at 598.33 (-6.43)
13 days to July expiration
Action: Close put spread.
Buy to close RUT Jul 600 Put
Sell to close RUT Jul 590 Put
For a net price of $4.20-4.30 Debit or better.
Profit or loss: -$200 per entry.
*****Trade History*****
22 June 2010: Initiate Trade
RUT (Russell 2000 Index) Iron Condor initiated on 22 June 2010
Trade Type: High Probability, Low Reward Iron Condor
Trade Summary
22 June 2010
RUT at 657.98 (-2.10)
23 days to July expiration
Action: Sell a new iron condor for July expiration.
Sell to open RUT Jul 710 Call
Buy to open RUT Jul 720 Call
Sell to open RUT Jul 600 Put
Buy to open RUT Jul 590 Put
For a net price of $2.10-2.20 credit or better. [All TOS autotrade participants were filled at $2.10.]
Net margin required: $790 per entry
Analysis:
This is our first trade for July. We are risking $790 to make $210 for every entry. Our breakeven points are 712.1 on the upside and 597.9 on the downside and probability of about 69% success. The risk/reward ratio (R3) stands at 3.76.
Because we’re risking alot more than what we can potentially make, we need to keep a close watch at this trade. Since we’re short 710 call and 600 put, we shall set our mental stop at 680 on the upside and 630 on the downside. As long as the RUT trades between 630 and 680, we have nothing to fear. However, we should be ready to adjust our risk if the RUT trades pass these levels.
Good trading,
Gary
