SPY Position Update
Listed below is the status of our SPY Iron Condor trade as of Monday, January 4th. This position has been open for 25 days:
SPY closed at $113.33
SPY is priced ABOVE its current 14-day EMA (see SPY chart down below)
SPY is trading ABOVE its 20-day Bollinger Band SMA (see SPY chart)
SPY is trading ABOVE its 50-day simple moving average (see SPY chart)
SPY is well ABOVE its 200-day simple moving average (see SPY chart)
Relative Strength Indicator (RSI) has turned bullish (See Spy chart)
Moving Average Convergence/Divergence (MACD) is neutral (See Spy chart)
SPY Bull Put Spread
We are closing out the entire put spread for an approx. $980 profit (see tables below)
SPY Risk Analysis
Since we are closing out the short $104 strike put, the only risk we have to manage is the $115 strike price short call. The risk associated with the sold call will be evaluated and resolved based on the Exit Plan.
DIA Position Update
Listed below is the status of our DIA Iron Condor trade as of Monday, January 4th. This position has been open for 25 days:
DIA closed at $105.66
DIA is priced ABOVE its 14-day EMA (see DIA chart down below)
DIA is trading ABOVE its 20-day Bollinger Band SMA (see DIA chart)
DIA is trading ABOVE its 50-day simple moving average (see DIA chart)
DIA is well ABOVE its 200-day simple moving average (see DIA chart)
Relative Strength Indicator (RSI) turned bullish (See DIA chart)
Moving Average Convergence/Divergence (MACD) is neutral (See DIA chart)
DIA Bull Put Spread
We are closing out the entire put spread for an approx. $675 profit (see tables below)
DIA Risk Analysis
Since we are closing out the short $98 strike put, the only risk we have to manage is the $108 strike price short call. The risk associated with the sold call will be evaluated and resolved based on the Exit Plan.
The rules for exiting both Bear Call spread positions (SPY and DIA) are:
Anytime the market maker is willing to accept a limit price of less than .11 on one of our short strikes, buy back all the short contracts and sell the long positions on the same spread. However, if it is a few days prior to the expiration date, we may hold out for a .05 bid.
If the delta associated with the short put rises to .50 we will look to close out this spread (buy the short contracts, sell the long).
On option expiration day, if rules 1 and 2 above have not been activated, let the Bear Call spreads expire worthless and we keep the entire sold premium for any open contracts where the short strikes are not threatened.
We initiated both Iron Condor positions (SPY and DIA) as separate orders with four legs each. As mentioned above we are closing all the Bull Put spread contracts. The Bear Call spreads will be closed out as a separate order following the Exit Rules described above.
Last Saturday's Couch Potato "Final Comment" section stated"... The obvious best-case scenario for us is another week similar to past few weeks and we should be able to close-out our January options with nice gains!" Today's market surge allowed us to close our put spreads. Now we need stocks to ease up a bit so that we can exit the call spreads.
Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.
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