The bulls remained in charge Friday; our IWM November Iron Condor is getting close to the adjustment trigger.
IWM November Iron Condor:
IWM November Iron Condor as of the close Friday:
The position is currently -$.98. IWM closed Friday at 110.69. The adjustment trigger is at 1 point before the short strike on either side. The adjustment is to roll the threatened side 3 points, as outlined in the article posted on September 26. On the upside, the adjustment trigger is if IWM reaches 111, and closes above that level. The monthly Non Farms Payroll report is due out Tuesday morning; if it is a negative report it could give us that welcome pullback.
In order to maintain enough credit in the trade, it is also recommended to roll up the put spreads to help offset the cost of the call roll. In the case of our open position, I would be inclined to roll the put spreads up to -104/+99, or 5 points. The delta of the new short strike is currently -.12. If the adjustment is made, it is a trader's choice whether to increase the position size to maintain sufficient credit in the trade. However, it is not recommended to increase any more than 1.5 times the original position.
Target gain remains at 10% of actual margin, or $41.
I will post a trade update next week. If is our every intention to re-incorporate the weekly Iron Condor and Credit Spread on SPX; but will wait until I see more signs that the market is settling down from the large intra-day moves we have seen over the last few weeks. Last week I was overly anxious to get back into my weekly trade plan, and that position as you know resulted in a loss. Non-directional weekly trades are best in a channeling market, so we remain in cash until it appears the market will cooperate.
As always, stay keen on your risk management and trade carefully.