The broad market managed to eke out small gains, bouncing into the close to pare early losses Friday. Investors appear to have shrugged off the latest harsh words between the US and North Korean leaders. The benchmark index SPX closed +1.62 points at 2505.22, the second weekly gain in a row. Friday's close represented a gain for the week of .1%
SPX 6 month chart
The CBOE's volatility index, VIX, also dipped again yesterday. The index closed at 9.59, -.08 points so is now far below the historical average of 12.
VIX 6 month chart
Below is the open position status:
SPY Monthly Iron Condor for October
This position was opened on Monday, September 11; details below:
- SOLD SPY October 253 Call, .47 credit.
- BOUGHT SPY October 258 Call, .08 debit.
- SOLD SPY October 239 Put, 1.10 credit.
- BOUGHT SPY October 234 Put, .69 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 October Iron Condor:
Think or Swim is showing the position is +$12.55, and it is quite short delta so would benefit from a pullback. SPY closed Friday at 249.54, a gain of +.10 or .04%.
Below is the SPY chart showing the short strikes:
SPY 6 month chart
RUT Iron Butterfly for October
This position was opened Monday, September 18; details below:
- SOLD RUT October 1440 Call, 19.40 credit.
- BOUGHT RUT October 1490 Call, 2.20 debit.
- SOLD RUT October 1440 Put, 17.20 credit.
- BOUGHT RUT October 1390 Put, 5.70 debit.
Order was filled as an "Iron Condor" for $28.70 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT October 1500 Call
Order for extra long call was filled for $1.25.
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: $2,255.
Target Gain: 5% of the gross margin ($250/contract)
Max loss: 10% of the gross margin ($500/contract)
Below is the risk graph as of the close Friday:
RUT October Iron Butterfly:
Below is the 6 month chart for RUT:
RUT 6 month chart:
RUT posted a record-high closing yesterday, up +6.60 points, .5%, AT 1450.78. The close represented the first record closing since July 25. The position is at our upper adjustment trigger point, so if RUT does not pull back Monday we may make the adjustment as per the guidelines. The recommended adjustment will be to roll the call spreads up 20 points. An update will be posted if the adjustment is necessary.
Next week's economic news, is summarized below:
8:40 am Fed's William Dudley speaks
12:40 pm Fed's Charles Evans speaks
9:00 am S & P Case Shiller HPI
9:30 am Fed's Loretta Mester speaks
10:00 am Consumer Confidence
11:50 am Fed Chair Janet Yellen speaks
8:30 am Durable Goods Orders
9:15 am Fed's Neel Kashkari speaks
10:00 am Pending Home Sales
10:30 am EIA Petroleum Status Report
1:30 pm Fed's James Bullard speaks
8:30 am Jobless Claims
8:30 am International Trade in Goods
8:30 am GDP
9:45 am Fed's Esther George speaks
8:30 am Personal Income and Outlays
9:45 am Chicago PMI
10:00 am Consumer Sentiment
11:00 am Fed's Patrick Harper speaks
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,