New Trade Entry : SPX Weekly Iron Condor for October 4 cycle. Below is the position entered a short while ago:
SPX Iron Condor Position Entered , Thursday, October 17, 8 days prior to expiration. The Option Code for this cycle is SPXW131025, expiring Friday, October 25.
SPX October 4 Iron Condor position shortly after entry
Time of entry: 10:40 am Eastern. SPX price: 1720.97, VIX at 13.31
Call Spreads: -1750/+1760. Delta of short call .11 at time of entry
Put Spreads: -1675/+1665. Delta of short put -.12 at the time of entry
Credit received: $1.30
Maximum margin/risk is $870. Maximum risk is the width of the spread ($1,000 less credit received $130.
Target Gain: $97.50 (75% of credit received). This gain represents a 11.2% gain on actual margin
Maximum Loss: $130
Adjustment Trigger: If the delta of the short call or short put reaches entry delta +10, roll out the threatened side 10 points. As outlined in the guidelines published on July 4, it is a trader's choice after adjusting to either add additional spreads at the new strikes to make up the difference in credit, or to just have a reduced target gain. Because this is a weekly position, it is perfectly acceptable and up to the individual to just close the trade rather than adjust. If an adjustment point is reached on my position, I evaluate the market conditions and length of time in the position to help me make the decision to adjust or exit.
The political battle over the debt ceiling has been settled for now, but there is much uncertainty in my mind if the market will remain at these bullish levels. Because of this uncertainty, I am entering into this week's position very, very cautiously. For those of you trading this weekly Iron Condor, I recommend keeping your position size small until we see how the market digests the temporary solution.
For those unfamiliar with this strategy, the above reference article can be found here: Link to Articles
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully.