***Closed***SPY iron condor initiated on 26 July 2010
18 Aug 2010: Close Trade
SPY (Standard & Poors Dep Rec) Iron Condor initiated on 26 Jul 2010
Trade Type: Low Probability, High Reward Iron Condor
Trade Summary
18 Aug 2010
SPY at 110.155 (+0.575)
2 days to expiration
Action: Close iron condor for Aug expiration.
Buy to close SPY Aug 114 Call
Sell to close SPY Aug 116 Call
Buy to close SPY Aug 107 Put
Sell to close SPY Aug 105 Put
For a net price of $0.10 debit or better.
Profit or Loss: +$85 per entry
******Trade History******
26 Jul 2010: Initiate Trade
SPY (Standard & Poors Dep Rec) Iron Condor initiated on 26 Jul 2010
Trade Type: Low Probability, High Reward Iron Condor
Trade Summary
26 Jul 2010
SPY at 111.3.9 (+0.98)
25 days to expiration
Action: Sell a new iron condor for Aug expiration.
Sell to open SPY Aug 114 Call
Buy to open SPY Aug 116 Call
Sell to open SPY Aug 107 Put
Buy to open SPY Aug 105 Put
For a net price of $0.93-0.95 credit or better.
Net margin required: $107 per entry
Analysis
This is our first trade for August. We were wary of entering new trades last week due to the uncertainty revolving the European stress test and we were glad we didn’t put in any trade.
For this simple iron condor, we are risking $107 to make $93. This gives us a risk/reward ratio (R3) of about 1.15 with a probability of success of nearly 50%. Our breakeven points are 114.93 on the upside and 106.07 on the downside. Each entry gives us a delta of -5.39.
We may enter a few more such trades as we go into August depending on the situation of the market.
Good trading,
Gary
