Finally, a week of gains, although slight, after a two week losing streak.
The broad market closed higher on Friday with the main indexes posting solid weekly gains after neither Federal Reserve Chairwoman Janet Yellen nor European Central Bank President Mario Draghi offered clues about future monetary policy moves in a pair of speeches at a central banker retreat in Wyoming.
The benchmark index SPX closed up 4.08 points, +.2% at 2443.05. Friday's close represented a gain for the week of +.07%, after two losing weeks in a row.
Below is the open position status:
SPX Weekly Iron Condor for September 1 Cycle
This position was opened on Friday, August 25; details below:
Order executed for this week's position:
SOLD SPX September 1 2480 Call, 1.05 credit.
BOUGHT SPX September 1 2490 Call, .40 debit.
SOLD SPX September 1 2405 Put, 1.85 credit.
BOUGHT SPX September 1 2395 Put, 1.25 debit.
Order was filled as an "Iron Condor" for $1.25 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: $875.
Target Gain: 7% of margin/risk or $60.
Max loss: 10% of margin/risk or $85.
Below is the risk graph of this week's position as of the close Friday:
SPX September 1 Weekly Iron Condor:
Think or Swim is currently showing the position +$35, the debit to close is $.90 as of the close. Our order remains in place to exit for a debit of $.65 which would be target gain, or if the max loss of 10% is reached.
Below is the SPX chart showing the short strikes:
SPX 6 month chart
The guidelines call for the position to remain open until target gain is reached, as long as SPX stays between the short strikes. They also call for exiting at the pre-set max loss, or if SPX reaches either short strike. It is recommended to have "good to cancel" order in for both target gain and max loss. The setup of conditional orders can vary by broker, so please check with your broker if you are unfamiliar with conditional orders on your trading platform.
SPY Monthly Iron Condor for September:
This position was opened on Monday, August 7; details below:
- SOLD SPY September 252 Call, .53 credit.
- BOUGHT SPY September 257 Call, .08 debit.
- SOLD SPY September 238 Put, .97 credit.
- BOUGHT SPY September 233 Put, .62 debit.
Order was filled as an "Iron Condor" for $.80 net credit (all four legs) .
Margin/Risk is calculated by the width of the wings ($500), less credit received.
Margin/Risk for this trade: $420.
Target Gain: 10% of margin/risk.
Max loss: 15% of margin/risk.
Below is the risk graph of the position as of the close Friday:
SPY September Iron Condor:
Think or Swim is currently showing the position up +$34, so with any cooperation from the market we may be able to exit for target gain next week. Our order remains in place to close for a debit of $.38 which would be target, or if the max loss reaches 15%.
Below is the SPY chart showing the short strikes:
SPY 6 month chart
The guidelines call for the position to remain open until target gain is reached, as long as SPY stays between the short strikes. They also call for exiting at the pre-set max loss, or if SPY reaches either short strike. It is recommended to have a "good to cancel" conditional order in to exit the position for target gain or max loss. Please follow your broker's specific guidelines on the setup of conditional orders as they can vary by broker.
Next week's economic news, is summarized below:
Monday, August 28
8:30 am International Trade-in Goods
Tuesday, August 29
9:00 am S & P Case Shiller HPI
10:00 am Consumer Confidence
8:15 am ADP Employment Report
8:30 am GDP
10:30 am EIA Petroleum Status Report
8:30 am Jobless Claims
8:30 am Personal Income & Outlays
9:45 am Chicago PMI
10:00 am Pending Home Sales
8:30 am Monthly Employment Situation Report
9:45 am PMI Manufacturing Index
10:00 am Construction Spending
10:00 am Consumer Confidence
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,