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Below is the position opened a short while ago:
SPX Weekly Iron Condor:
The Option Code for this cycle is SPXW140822, expiring August 22.
The strikes for this week's position are:
Calls: -1985/+1995. Delta of short call .08
Puts: -1905/+1895. Delta of short put -.12
Below is the SPX chart showing the short strikes:
SPX 6 month chart
Credit received: $1.30. SPX was at 1951.32, and VIX at 12.77 when the trade was filled.
Target gain: 7% of margin/risk. Margin/risk is calculated by the width of the wings ($1,000), less credit received. For this week's position, margin/risk is $1,000 less $1.30 credit, or $870.
Max loss: 10% of margin/risk.
The guidelines call for the position to remain open until target gain is reached, as long as SPX stays between the short strikes. They also call for exiting at the pre-set max loss, or if SPX reaches either short strike.
Having said that, it is a traderâ€™s individual decision whether to wait for target gain, or max loss, on any position. Trading is a blend of oneâ€™s individual style, risk tolerance, and intuition. This combination can help reach your annual trade plan results. I recommend following your own trade style; there is nothing wrong with exiting a position early. Remember with weekly trades, there are 52 opportunities in a year to trade so it is important to be comfortable with your trade size and position. Remember, trading is an art, not a science.
As always, stay keen on your risk management and trade carefully,