Monthly IWM Iron Condor for February
Looking ahead to the February cycle for a monthly position, I have begun to look at a February IWM Iron Condor. Monday is 39 days to expiration; however the position can be entered any day next week.
IWM is currently trading at 103.62. The guidelines call for the short strike to be at a delta of .15 - .20. Based on the current price, the current strikes recommended would be:
Calls: -120/+125 - Current delta of the 120 Call is .17.
Puts: -108/+103 - Current delta of the 108 Put is -.15
This example is shown in the graph below:
IWM February Iron Condor example:
The current credit for this sample position is only $.73. The minimum credit recommended for this trade entry is $.80, so I would not enter this position until there was sufficient credit. The illustration is just an example for planning purposes. 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, and look for the lower end of the recommended delta-range.
Depending on the entry day and time, the deltas and short strikes may be different than outlined above.
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.