Monthly IWM Iron Condor for December
Looking ahead to the December cycle for a monthly position, I have set up a December IWM Iron Condor can be entered any time this week. Tomorrow (Wednesday) is 37 days prior to expiration, so if the market remains calm I will likely open the position then.
As of this writing, IWM is trading at 108.92. The guidelines call for the short strike to be at a delta of .20 or less. Based on the current price, the current strikes would be:
Calls: -114/+119 - Current delta of the 114 Call is .16.
Puts: -103/+98 - Current delta of the 103 Put is -.18
This example is shown in the graph below:
IWM December Iron Condor example:
The current credit for this sample position is $.88. Some traders may choose to be more aggressive and sell spreads with a higher delta on the short for more credit. However, being the more conservative trader I am, I will go as wide as possible as long as I can still get the minimum recommended credit of .80.
Depending on the entry day and time, the deltas and short strikes may be different than outlined above. Also, if either short strike delta exceeds beyond 20 at the time of entry, it is recommended to select the first strike with a delta of 20 or under.
The target gain on the monthly Iron Condor is 10% of actual margin/risk, and the maximum loss is 15%.
For those of you who may not be familiar with the trade setup and management, the guidelines were published on September 10, and can be found here: Link to Articles
I will post exact entry details when the position is entered.
As always, trade carefully and stay keen on your risk management.