Pause for the cause as the bulls take a little break at the end of the week.
The broad market managed to lock in a slight gain for the week, dipping ever-so-slightly after reaching new highs earlier in the week. The benchmark index SPX closed down -.91 points, -.04%, at 2472.54. Friday's close represented a gain for the week of +.5%.
SPX 6 month chart
Below is the open position status:
We only have one open position on this weekend; we were given the gift of an early exit on our weekly SPX Iron Condor just one day after trade entry. That does not happen very often, but I'm always grateful to close a weekly trade for target gain and not have the weekend risk.
RUT Iron Butterfly for August
This position was opened on Monday, July 17; details below:
- SOLD RUT August 1430 Call, 19.60 credit.
- BOUGHT RUT August 1480 Call, 3.00 debit.
- SOLD RUT August 1430 Put, 20.70 credit.
- BOUGHT RUT August 1380 Put, 7.50 debit.
Order was filled as an "Iron Condor" for $29.80 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT July 1500 Call
Order for extra long call was filled for $1.35.
Margin/Risk is calculated by the width of the wings ($5,000), less credit received, plus the cost of the extra long call.
Margin for this trade at entry: $2,155.
Target Gain: 5% of the gross margin ($250/contract)
Max loss: 10% of the gross margin ($500/contract)
On Thursday, July 20, RUT reached the upside adjustment trigger point of 1440, and was adjusted as follows:
BOUGHT RUT August 1430 Call, 26.85 debit.
SOLD RUT August 1480 Call, 4.60 credit.
SOLD RUT August 1450 Call, 14.80 credit.
BOUGHT RUT August 1500 Call, 2.00 debit.
Net debit (all four legs): $9.45
The graph of the adjusted position is below:
RUT August Iron Condor after upside adjustment:
The position summary after the adjustment is as follows:
SHORT August 1450 Call
LONG August 1500 Call
SHORT August 1430 Put
LONG August 1380 Put
LONG August 1500 Call bought at trade entry to cut position delta.
The position is now a 20 point wide Iron Condor.
The next adjustment trigger point will be either short strike, depending on overall position status and market conditions.
Below is the risk graph as of the close Friday:
RUT August Iron Butterfly:
RUT closed Friday at 1435.84, down -6.52 points or .45%. Think or Swim is currently showing the position +$52, and slightly positive delta.
Next week's economic news, is summarized below:
10:00 am Existing Home Sales
FOMC Meeting Begins
9:00 am S & P Case Shiller HPI
10:00 am Consumer Confidence
10:00 am New Home Sales
10:30 am EIA Petroleum Status Report
2:00 pm FOMC Meeting Announcement
8:30 am Durable Goods Orders
8:30 am International Trade-in Goods
8:30 am Jobless Claims
8:30 am GDP
10:00 am Consumer Sentiment
For those unfamiliar with the strategies we trade, the trade management guidelines for all the Couch Potato Trader plays can be found here:
Link to Articles
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,