SPX Weekly Iron Condor Test position for June Monthly Cycle.
Below is the position opened this morning:
SPX Weekly Iron Condor Example
The strikes for this week's test (Paper Money) position are:
Calls: -1970/+1980. Delta of short call .09
Puts: -1895/+1885. Delta of short put -.12
This is the regular monthly cycle expiring June 21, the option code is SPX140621.
Below is the SPX chart showing the short strikes:
SPX 6 month chart
Credit available as of today: $1.10. The minimum credit according to the guidelines is $1.25. The phrase "when the VIX is low, it's time to go" has been used over and over again, but worth mentioning once again. Basically, at these low levels, it is very difficult for option premium sellers to obtain a fair premium for an acceptable risk in capital.
I would not enter this as a live position with the VIX at these lows; I personally do not feel it is worth the risk without getting at least $1.25. VIX is up slightly today with the drop, but still at precariously low levels. I will continue to paper trade this until the volatility increases so we can get an acceptable credit for a short delta of approximately .10.
VIX 6 Month Chart
Target gain: 7% of margin/risk
Max loss: 10% of margin/risk.
This position will remain open until target gain is reached, as long as SPX stays between the short strikes. It will be exited at the pre-set max loss, or if SPX reaches either short strike.
In closing, I want to stress again that it is NOT recommended to place this trade live yet. This is, however, an excellent opportunity to backtest it or paper trade the strategy.
As always, stay keen on your risk management and trade carefully,