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Escalating worries and confusion over the Russia/Ukraine conflict spooked the market Friday, completely the opposite from the previous week.
Friday opened relatively quiet, but turned sharply down just before noon when reports came out about Ukranian artillery destroying a portion of a Russian convoy of armored vehicles that was seen entering Ukraine from Russia. Last Friday the market soared on Putin's comment that Russia was ending military exercises in the Ukraine, this week was just the oppositeâ€¦..guess we can't believe anything he says.
SPX did recover most of the losses to close about flat, at 1955.06.
Below is the current status of our two open positions:
1) XSP September Monthly Iron Condor
XSP, the mini-index for SPX (1/10th the size), closed Friday at 195.51. The graph of the open position is below:
XSP September Iron Condor
The position is currently +15.99, or 3.8% of the margin/risk. The target gain remains at 10%, or $42.
Below is the XSP chart showing the short strikes:
XSP 6 month chart
For those of you who have been trading/following the monthly Iron Condor, you will recall that the reason this month's position is in XSP is because of the SEC ruling on SPY not allowing one point strike increments over 200. As it turns out, the call strikes ended up being -200/+205, and one of our readers entered this position on SPY, for a slightly higher credit ($.83 versus $.80 on XSP).
I thought it would be interesting to follow the two positions through the cycle to see how the ETF (SPY) behaves as compared to the mini-index (XSP). Below is the risk graph of George's position on SPY:
SPY September Iron Condor
The current gain on the SPY position is just slightly lower than XSP, but it is still very early yet in the cycle. I also noted that SPY has a slightly higher negative delta than XSP (-12 as compared to -10), so will benefit more with a pullback. I will continue to monitor both position as a learning experience for everyone and post both graphs in my weekend updates.
2) SPX August 4 Weekly Iron Condor
The current position as of the close is shown below:
The open weekly position is currently +10. The target gain remains at 7% of the margin/risk, or $61.
The chart below shows the short strikes:
SPX 6 month chart
There is a fair amount of economic news being released next week:
10:00 am Housing Market Index
8:30 am Consumer Price Index
8:30 am Housing Starts
2:00 pm FOMC minutes
I never like to have an open weekly position on for the release of the FOMC minutes in case it brings some surprises and causes the market to move significantly. It is recommended to exit the SPX Weekly Iron Condor by the end of the day on Tuesday, or at the latest before the minutes come out on Wednesday.
I will post trade updates as appropriate.
As always, stay keen on your risk management and trade carefully,