Recommended trade entry for Friday, January 13
Option Code: SPX170120
Expiration: Friday, January 20. Please note that because this is the regular monthly cycle, the last day to trade this position is next Thursday, January 19.
Recommended Trade Entry:
- SELL SPX January 20 2305 Call, currently $1.35. Delta of short call: .12.
- BUY SPX January 20 2315 Call, currently .65.
- SELL SPX January 20 2245 Put, currently 1.75. Delta of short put: -.12.
- BUY SPX January 20 2235 Put, $.1.20.
It is recommended to place the order as a single entry: SELL " Iron Condor".
Current mid price for all four legs: $1.25, which is the recommended 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. But it is not recommended to open the position unless you can get $1.25 credit. Please also keep in mind that with the volatility so low (VIX is at 11.37), this week's position is only 60 points wide between the two short strikes. Traders who do not feel comfortable entering this weekly position should consider 1) a smaller size than normal, or 2) sitting on the sidelines for the week.
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.
As always, stay keen on your risk management and trade carefully,