New Trade Entries: SPX Weekly Put Credit Spread and Iron Condor for May 5 cycle.
We entered two positions today, 10 days prior to expiration:
1. SPX Put Credit Spread Position Entered Tuesday, May 21
SPX May 5 Put Credit Spread at entry
Time of entry: 11:00 am Eastern. SPX price: 1,663.61 at entry; VIX at 13.33
SOLD May 5 1625 Put. Delta -.16 at time of entry
BOUGHT May 5 1615 Put
Credit received: $1.00
Maximum margin/risk is $900. Maximum risk is the width of the spread ($1,000) less credit received $100).
Target Gain: $75.00 (75% of credit received). This gain represents a 8.3% gain on actual margin.
Maximum Loss: $100
2. SPX "Test Kitchen" Iron Condor Position Entered Tuesday, May 21
Please note this is not a live trade recommendation, as mentioned earlier I am continuing to paper trade the strategy for those of you interested in a "no touch" trade. The back testing results indicated an average gain per week of 2.6% for the 52 weeks tested, taking losses into consideration. I feel it is worthwhile to continue to place the trade each week on paper to see how it behaves in current market conditions.
SPX May 5 Iron Condor at time of entry
Time of entry: 1:00 pm Eastern. SPX price: 1670.64 at entry; VIX at 13.01.
Call spreads: -1700/+1725. Short call delta: 15.
Put spreads: -1630/+1600. Short put delta: -14.
Credit received: $3.50
Margin requirements: $3,000
Maximum risk: $2,650 ($3,000 less credit of $350)
Target gain: 60% of credit received, or $210 (before commissions)
Trade will be exited if max loss of $350 is reached (100% credit received) OR if either short strike is reached.
I will post an update as the trades progress.
The next entry for the SPX weekly Iron Butterfly will be Thursday, May 23, if market conditions are suitable. Trade recommendation for entry price ranges and strikes will be posted tomorrow.
As always, stay keen on your risk management and trade carefully.