Recommended trade entry for Friday, August 19
Option Code: SPX160826
Expiration: Friday, August 26.
Recommended Trade Entry:
For those trading the SPX Weekly Iron Condor with live capital, please proceed with caution. In order to receive the minimum credit, the position is not as wide (not as much room between the two short strikes) as we usually try to get. This is primarily due to the fact that volatility is so low, with the VIX just over 12. Some traders may choose to sit on the sidelines this week.
- SELL SPX August 26 2205 Call, currently $1.00. Delta of short call: .10.
- BUY SPX August 26 2215 Call, currently $.45.
- SELL SPX August 26 2140 Put, currently $ 3.10. Delta of short put: -.15.
- BUY SPX August 26 2130 Put, currently $2.35.
It is recommended to place the order as a single entry: SELL " Iron Condor".
Current mid price for all four legs: $1.30. We recommend trying to get filled for the current mid or a few cents below; the minimum suggested credit is $1.25. 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,