Recommended trade entry for Friday, February 12. I am VERY CAUTIOUSLY recommending this trade.
For those entering the trade below with live capital; it is recommended to trade in a much smaller size than usual. The market is still recovering from weeks of volatility, and we are treading very lightly on new trade entries for the short term weekly Iron Condor.
Option Code: SPX160219
Expiration: Friday, February 19. Because this week's trade is the regular February monthly cycle, the last day to trade this position is Thursday, February 18.
Recommended Trade Entry:
I am taking advantage of the higher volatility and placing the short strikes at a lower delta than normal to get a bit wider on the position.
- SELL SPX February 1915 Call, currently $2.60. Delta of short call: .09.
- BUY SPX February 1925 Call, currently $1.50.
- SELL SPX February 1745 Put, currently $ 2.40. Delta of short put: -.08.
- BUY SPX February 1735 Put, currently $2.10.
It is recommended to place the order as a single entry: SELL " Iron Condor".
Current mid price for all four legs: $1.40. We recommend trying to get filled for the mid or a few cents below; $1.25 is the suggested minimum credit for this trade. Bid/ask prices can sometimes be wide, so there is no guarantee there will be a fill at the current mid price. Some traders may get filled at a better credit, others may have to cave in a bit to get the order executed.
Please note: Traders should always be aware of any news events that may cause a sudden move in the market. If that occurs, it is recommended to immediately cancel the working order until things settle. Depending on the move that may occur, the above strikes may need to be changed to appropriate strikes within the .10 - .15 range. It is each individual's responsibility to select the strikes they feel most comfortable with, depending on trading style and risk tolerance.
Update will be posted with exact position details when the trade is opened.
For those unfamiliar with the strategy, the trade management guidelines for all Couch Potato Trader strategies were updated on August 20, 2015, and can be found here:
Link to Articles
As always, stay keen on your risk management and trade carefully,