SPX November 3 Iron Condor; Stop Loss Hit and Position Closed
The relentless rally was too much for the November 3 Iron Condor. Our stop loss was hit and the position closed as follows:
BOUGHT SPX November 3 2590 Call, 4.45 Debit.
SOLD SPX November 3 2600 Call, 2.35 Credit.
BOUGHT SPX November 3 2490 Put, 2.75 Debit.
SOLD SPX November 3 2480 Put, 2.50 Credit.
Net Debit (all four legs): $2.35
Net Credit to Open Position: $1.50
This represented a loss of ($85), 10% of the margin/risk and our pre-set max loss. After our stop loss triggered, the market pulled back just a bit but we remain vigilant on risk management as usual. Some traders who did not have a stop order in place may choose to remain the position, "hoping" for a pullback. It could very well happen at any time, but I did not want to take the risk of a sharp move up today.
The alternate approach of entering with more time until expiration did not help us; the current market environment is just not conducive to a short term, non-directional trade strategy such as the weekly Iron Condor. For the time being, we are considering putting this trade on a back burner until a time when it appears to be a better environment, and stay with our monthly plays. I will evaluate over the weekend and post an update Monday.
As always, stay keen on your risk management and trade carefully,