We received a gift of a one-day trade from Mr. Market at the close Friday; the June 2 weekly SPX Iron Condor closed for target at the bell.
It's not too often that I've seen a trade reach target the same day as trade entry, but I will gladly accept the gift that was presented late Friday. I was away for an appointment but had my conditional order in as I always recommend. Upon returning after the market closed, I saw the closing order executed at 4:04 pm. Closing details are as follows:
BOUGHT SPX June 2 2135 Call, .65 Debit.
SOLD SPX June 2 2145 Call, .30 Credit.
BOUGHT SPX June 2 2040 Put, 3.00 Debit.
SOLD SPX June 2 2030 Put, 2.10 Credit.
Net Debit (all four legs): $1.25
Net Credit to Open Position: $1.85
This represented a gain of $60, 7.4% of the margin/risk and target for the trade.
While I usually don't watch one-minute charts that closely, I felt it relevant to post the VIX chart below. We entered the trade when the volatility was close to the high of the day, and the position enjoyed the steady drop into the market close which helped the trade reach target gain so quickly.
VIX one minute chart
The volatility index closed down .50, a 3.4% drop from the previous day.
SPX was down .5% at the low of the morning, but recovered to close down just 3 points at 2093. The broad market fell as the jobs report stirred rate-hike worries once again.
The Labor Department said the U.S. generated 280,000 new jobs in May, beating the gain of 210,000 that was expected.
Although positive for the broader economy, the strong jobs report has traders fearing that the days of ultra-loose monetary policy are coming to an end as a rate hike appears imminent.
SPX posted a loss for the week of .7%, the second week in a row to post a loss. The year-to-date gain has now been trimmed to just 1.7%.
The calendar is light for news next week; a recap of next week's economic news is below:
10:30 am EIA Petroleum Status Report
8:30 am Jobless Claims
8:30 am Retail Sales
8:30 am Import & Export Prices
10:00 am Business Inventories
8:30 am Producer Price Index
10:00 am Consumer Sentiment
Next week is the planned entry for the SPY Iron Condor for the July monthly cycle. Monday will be 39 days to expiration; so we will plan to enter the position sometime next depending on market conditions and available credit. For those unfamiliar with the trade, guidelines were last posted on September 10, 2013, and the article can be found at this link: Link to Articles
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,