Rally stalled, for now - who knows what next week will bring?
The broad market slumped into the close Friday as oil closed lower; but small weekly gains were recognized by all major indices.
Below is a summary of our open positions:
SPX Weekly Iron Condor
Order executed for this week's position:
- SOLD SPX March 1 2010 Call, 1.40 Credit.
- BOUGHT SPX March 1 2020 Call, .80 Debit.
- SOLD SPX March 1 1875 Put, 2.80 Credit.
- BOUGHT SPX March 1 1865 Put, 2.05 Debit.
Order was filled as an "Iron Condor" for $1.35 net credit (all four legs).
Margin/Risk is calculated by the width of the wings ($1,000), less credit received.
Margin/Risk for this week's trade: $865.
Target Gain: 7% of margin/risk or $60.
Max loss: 10% of margin/risk or $86.
Below is the risk graph of this week's position as shown on my broker's platform:
SPX March 1 Weekly Iron Condor:
SPX closed down 5 points Friday at 1946, -.19%. Our position is up $20; the current debit as of the close the position is $1.15. Our order remains in place to close it for .75 which would be target gain, or 2.20 which would be max loss.
Below is the SPX chart showing the short strikes:
SPX 6 month chart
SPY March Iron Condor
This position was entered on Tuesday, February 9. Details are below:
- SOLD SPY March 200 Call, .58 Credit.
- BOUGHT SPY March 205 Call, .17 Debit.
- SOLD SPY March 168 Put, 1.54 Credit.
- BOUGHT SPY March 163 Put, 1.00 Debit.
Order was filled as an "Iron Condor" for $.95 net credit (all four legs).
Margin/Risk is calculated by the width of the wings ($500), less credit received.
Margin/Risk for this trade: $405.
Target Gain: 10%of margin/risk.
Max loss: 15% of margin/risk.
Below is the risk graph as of the close Friday:
SPY March Iron Condor
This position is very negative delta, basically at breakeven, and will benefit from a pullback. The position will be closed at target gain of 10%, if SPY reaches either short strike, or the pre-set max loss of 15% is reached.
Below is the SPY chart showing the short strikes:
SPY 6 month chart
RUT March Iron Butterfly
This monthly position was opened on Thursday, February 18. Entry details are below:
- SOLD RUT March 1010 Call, 25.70 credit.
- BOUGHT RUT March 1060 Call, 6.30 debit..
- SOLD RUT March 1010 Put, 29.80 credit.
- BOUGHT RUT March 960 Put, 13.00 debit.
Order was filled as an "Iron Condor" for $36.20 net credit (all four legs).
BOUGHT RUT March 1100 Call.
Call order was filled for $1.15 debit
Upside Adjustment made February 25:
BOUGHT RUT March 1010 Call, 31.20 debit.
SOLD RUT March 1060 Call, 7.00 credit.
SOLD RUT March 1030 Call, 19.20 credit.
BOUGHT RUT March 1080 Call, 2.70 debit.
Net debit (all four legs): $7.70
Second Upside Adjustment February 26:
BOUGHT RUT March 1030 Call, 23.55 debit.
SOLD RUT March 1080 Call, 3.60 credit.
SOLD RUT March 1050 Call, 12.90 credit.
BOUGHT RUT March 1100 Call, 1.30 debit.
Net debit (all four legs): $8.35
The position summary after the adjustment is as follows:
SHORT March 1050 Call
LONG March 1100 Call
SHORT March 1010 Put
LONG March 960 Put
LONG March 1100 Call purchased at trade entry
The position is now a 40 point wide Iron Condor.
Below is the risk graph of this position as shown on my broker's platform:
RUT March Iron Condor:
RUT closed Friday at 1037, up 5.58 points or .54%. The position is slightly negative delta, up slightly which is a surprise, considering having been adjusted twice already.
The next adjustment trigger will be at either short strike, depending on position status and market conditions at the time the trigger is reached. Because this position has already been adjusted twice, we will evaluate at the time either short strike is reached to determine if it is a wise risk:reward decision to adjust for the third time, or exit the position and move on.
New Test Kitchen Trade; SPX Bearish Butterfly
This new trade was entered in Paper Money Wednesday, February 24. Position details are below:
- BOUGHT 3 SPX May 1 1915 Put, 73.40 debit..
- SOLD 6 SPX May 1 1875 Put, 58.10 credit.
- BOUGHT 3 SPX May 1 1825 Put, 43.40 debit.
Order was filled as a "Butterfly" for $.60 net debit(all three legs) per butterfly.
Margin/Risk is calculated at $1,000 per unit, plus the cost of the butterfly,
Margin/Risk for this trade: $3,180.
Target Gain: $500 for the 3-unit position
Max loss: $750 for the 3-unit position
As stated in the guidelines published February 17, the target gain and max loss may be modified depending on length of time in the trade, etc. Since this is a new trade being incorporated into the plan, we will evaluate progress as time goes on.
Below is the risk graph of this position as of the close Friday:
SPX May 1 Bearish Butterfly:
The position is flat delta, which is expected, and at breakeven. We will continue to let it work as per the guidelines.
Trade updates will be posted as appropriate.
Next week's economic news is summarized below:
9:45 am Chicago PMI Manufacturing Index
10:00 am Pending Home Sales
19:30 am Dallas Fed Manufacturing Survey
9:45 am PMI Manufacturing Index
10:00 am ISM Manufacturing Index
10:00 am Construction Spending
8:15 am ADP Employment Report
10:30 am EIA Petroleum Status Report
2:00 pm Beige Book
8:30 am Jobless Claims
8:30 am Productivity & Costs
10:00 am Factory Orders
10:00 am ISM Non Manufacturing Index
8:30 am Monthly Employment Situation Report
8:30 am International Trade
Updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,