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16 Nov 2010: Initiate Trade

SPY (Standard & Poors Dep Rec) Iron Condor initiated on 16 Nov 2010

Trade Type: Low Probability, High Reward Iron Condor

Trade Summary

16 Nov 2010

SPY at 117.92  (–2.11)
31 days to expiration

Action: Sell a new iron condor for Dec expiration.

Sell to open SPY Dec 122 Call
Buy to open SPY Dec 124 Call
Sell to open SPY Dec 115 Put
Buy to open SPY Dec 113 Put

For a net price of $0.98 credit or better.
Net margin required: $102 per entry

Analysis

This is our first trade after quite a while. This volatile market is not an easy place for us neutral traders. We’re risking $102 to make $98 for each trade. This gives us a risk/reward ratio (R3) of 1.04. This trade has a delta of -2.09, which is very neutral at the moment.

As indicated on the P&L chart, our break even points are 122.98 on the upside and 114.02 on the downside with a probability of about 41.27% of success.

The market seems to be very volatile at the moment due to the uncertainty and chatters on what other major economies may do to curb inflation. We won’t be too surprise to see wild moves on either direction. As such, we will try to lock in profits when we can.

Get ready for a wild ride soon.

Good trading,

Gary

Past Trades, Uncategorized Iron Condor, SPY

24 Aug: Initiate Trade

SPY (Standard & Poors Dep Rec) Iron Condor initiated on 24 Aug 2010

Trade Type: Low Probability, High Reward Iron Condor

Trade Summary

24 Aug 2010

SPY at 105.76 (-1.30)
24 days to expiration

Action: Sell a new iron condor for Sep expiration. SPY iron condor #2.

Sell to open SPY Sep 109 Call
Buy to open SPY Sep 111 Call
Sell to open SPY Sep 102 Put
Buy to open SPY Sep 100 Put

For a net price of $0.98-0.99 credit or better. [All TOS autotrade participants were filled at $0.98.]
Net margin required: $102 per entry

Analysis

This is our second trade and second SPY trade for Sep. We’re taking advantage of the spike in IV today to gather more premiums for this iron condor. We’re risking $102 to make $98. That gives us a risk/reward ratio (R3) of 1.04.

As indicated on the P&L chart below, our breakeven points are 109.98 on the upside and 101.02 on the downside with a probability of about 44.62%.

There is much uncertainty now in the market. There is a chance that the market will take a dip lower from here. Whatever happens we’ll be safe as long as the moves are not too great. We’ll be keeping an eye on the 2 trades that we have on and take profits off the table when we can.

Good trading,

Gary

Past Trades Iron Condor, SPY