New Trade Entry :
SPX Iron Condor for the June cycle, 8 days prior to expiration. Below is the position (paper, not a live position) entered today. 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. 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 Position Entered Wednesday, June 12
SPX June Iron Condor at time of entry
Time of entry: 1:30 pm Eastern. SPX price: 1620.42 at entry; VIX at 17.83.
Call spreads: -1665/+1690. Short call delta: 14.
Put spreads: -1565/+1535. Short put delta: -14.
I took advantage of the higher VIX to sell a lower delta, the choice at the time of entry was either a 16 or 14 delta and I felt there was sufficient credit to go a bit further away from the underlying price at the time.
Credit received: $3.40
Margin requirements: $3,000
Maximum risk: $2,660 ($3,000 less credit of $340)
Target gain: 60% of credit received, or $204 (before commissions)
Trade will be exited if max loss of $340 is reached (100% credit received) OR if either short strike is reached.
Current Open Positions:
1) RUT Put Credit Spread expiring this week. Below is the current position:
RUT June 2 Credit Spread at the close today
This position is currently $(19.03). RUT closed today at 972.30, just over 12 points away from our short strike. RUT weeklys have one less day to trade than the SPX, so this position must be closed tomorrow (Thursday) before the end of the day regardless of the gain to avoid risk of assignment. Max loss remains at $101. An OCO (one-cancels-other) order is in place to close the spread for target gain or max loss. Some traders may choose to manage these credit spreads manually, however, as I've mentioned before, having OCO orders in place reduces the emotions involved in closing a trade, as well as reduces the amount of time in front of the computer.
2) SPX Put Credit Spread for the June cycle, expiring June 22.
At approximately 3 pm EST with SPX at 1614.08, our stop limit order triggered to exit the position for the max loss of $95 as per the plan. While the short strike was still 34 points from the underlying, the increase in volatility today took the spread into the danger zone where it had to be exited. Having the exit order in place removed the risk of the loss exceeding the planned amount. With SPX closing at 1612.52, the loss would have been ($105) at the end of the day. A new position for the same cycle will be entered tomorrow (Thursday) if market conditions are within the guidelines.
I will post an update as the trades progress.
As always, stay keen on your risk management and trade carefully.