New Trade Entry : SPX Weekly Iron Condor for September 1 cycle. Below is the position entered short while ago:
SPX Iron Condor Position Entered Thursday, August 29, 8 days prior to expiration. The Option Code for this cycle is SPXW130906, expiring Friday, September 6.
SPX September 1 Iron Condor position shortly after entry
Time of entry: 10:50 am. SPX price: 1,644.38
Call Spreads: -1680/+1690. Delta of short call .11 at time of entry
Put Spreads: -1595/+1585. Delta of short put -.11 at the time of entry
Credit received: $1.40
Maximum margin/risk is $860. Maximum risk is the width of the spread ($1,000 less credit received $140.
Target Gain: $105 (75% of credit received). This gain represents a 12.2% gain on actual margin
Maximum Loss: $140
Adjustment Trigger: If the delta of the short call or short put reaches entry delta +10 (in this case .21), roll out the threatened side 10 points. As outlined in the guidelines published on July 4, it is a trader's choice after adjusting to either add additional spreads at the new strikes to make up the difference in credit, or to just have a reduced target gain.
I am not entering or recommending a weekly credit spread for this week; I will be sitting on the sidelines with the exception of the Iron Condor. With all the uncertainty over the next several days, I don't feel comfortable with a purely directional trade such as the credit spread. The Iron Condor gives a wider tent to withstand market movements, so I will hold the capital normally allocated to the credit spread in cash until next week. Remember, cash IS a position.
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully.