Friday was another roller-coaster day; our open positions endured the 16+ swing in SPX and closed positive.
SPX September 4 Iron Condor:
SPX September 4 Iron Condor as of the close Friday:
The position is currently +$17.56. The target debit to close the whole position is .40, which will result in a gain of $100 before commissions. As of the close Friday, the delta of the short put (1685) was -.19. The guidelines call for the threatened spread be rolled or closed if the delta of the short strike increases by 10 from time of entry, which would be if the short put delta reaches -.22. However, the short put is still 25 points away from the underlying (SPX closed at 1710); so it is a trader's choice whether to close the position at -.22 delta or keep it open. Quite often after such a big move as occurred Friday, there will be some retracement of the gap, or at least some consolidation. If there is follow through to the downside on Monday, I will likely close the position rather than adjust.
With the downdraft Friday, the debit to close the call spreads was only .05; but I could not get my order executed. I will have the order in for the open Monday. Since the short call is 50 points away from the closing price of SPX on Friday, some traders may prefer to let the calls expire worthless. My preference is to take everything off, removing all potential risk and move on to the next week.
IWM October Iron Condor:
IWM October Iron Condor as of the close Friday:
The position is currently +$6.48. IWM closed Friday at 106.59; the upside trigger for adjustment is at 108. The upside adjustment is to roll the threatened side 3 points, as outlined in the article posted on September 19.
I will post updates on the open positions next week.
As always, stay keen on your risk management and trade carefully.