Sitting on the sidelines for SPX Weekly Credit Spread.

As of this writing, it looks like the bears will have control of the open once again this morning. SPX futures are currently -14 points. With two days of movement outside a one-day standard deviation, I am not recommending entering a new weekly SPX position today. This is one of those weeks where I feel it is safer to sit on the sidelines, keep cash as my position, and look for a new trade entry next week.

The February IWM Iron Condor is currently +$16.95; the position at the close yesterday is shown below.

IWM February Iron Condor:

The position is slightly negative delta, so may survive the downside move today without adjustment. The adjustment trigger on the downside is when the short 109 put delta reaches -.27 (entry delta + 10); the current delta of the short put is .12. The target gain on this position remains at $42, or 10% of the maximum margin/risk. The position will be exited at target gain or max loss of $63 (15% of margin).

Having said that, it is a trader’s individual decision whether to wait for target gain, or max loss, on any position. Trading is a blend of one’s individual style, risk tolerance, and intuition. This combination can help reach your annual trade plan results. I recommend following your own trade style; there is nothing wrong with exiting a position early. Remember with weekly trades, there are 52 opportunities in a year to trade so it is important to be comfortable with your trade size and position. Remember, trading is an art, not a science.

As always, stay keen on your risk management and trade carefully.

Dot Hazlin