The bulls remained in control Friday, thanks to overnight news from China and Europe.

Open Position Update:

China's rate cut and ECB's Mario Draghi's dovish comments caused the indices to gap to their intra-day high shortly after the open, settling back just a bit during the week's final trading day.

Below is the status of our current open positions:

RUT December Iron Butterfly

This December Iron Butterfly was opened Thursday for a net credit of $30.67, plus a debit of $.75 for the extra long call. The position summary is as follows:

SHORT RUT December 1170 Call.

LONG RUT December 1220 Call.

LONG RUT December 1170 Put.

LONG RUT December 1120 Put.

Extra LONG RUT December 1250 Call.

Friday morning's open took RUT up to the upside adjustment trigger price of 1180. However, as per the guidelines we waited the first hour before making any adjustments to the position. Shortly after the opening gap, RUT pulled back and traded in a pretty flat range for the remainder of the day. RUT closed Friday at 1172.41, up just over a point from the previous day.

For those of you following/trading this month's RUT position, I thought it may be helpful to post the risk graph showing the trade including the long call we purchased, and without. The graphs below will illustrate how the extra long call can help "tweak" the trade in an upside move.

Below is the risk graph of the current position as of the close Friday including the long call:

RUT December Iron Butterfly

You will see the position deltas are -6.05, and the position is currently just above breakeven. Looking at the same position without the long call:

RUT December Iron Butterfly without the long call

If we had not purchased the extra long call, the position deltas would almost be double at -11.25, and the position would be slightly under water at $(20). Note the steepness of the T +0 line in the graph without the long call.

SPY December Iron Condor

This monthly position was entered Monday, November 10. The position summary is:

SHORT SPY December 210 Call.

LONG SPY December 215 Call.

SHORT SPY December 195 Put.

LONG SPY December 190 Put.

Position entered for a net credit of $.89 (all four legs).

SPY closed Friday at $206.68, up 1.10 points and yet another record high close. The current position is shown below:

SPY December Iron Condor

The position is currently +$10 despite being only 4 points below the short call strike of 210. The position has a negative delta of -13, so will benefit from any pullback. The position will remain open as long as SPY stays between the short strikes until target gain is reached. It will be closed, however, if either short strike is touched, or if the pre-set max loss of $61 (15% of margin) is reached.

The six month chart is below, indicating the short strikes:

SPY 6 month chart

Next week brings quite a bit of economic news; most of the week's releases are Tuesday and Wednesday ahead of the Thanksgiving holiday. A recap is below:


10:30 am Dallas Fed Manufacturing Survey


8:30 am GDP

9:00 am S & P Case Shiller HPI

10:00 am Consumer Confidence


8:30 am Durable Goods Orders

8:30 am Jobless claims

8:30 am Personal Income & Outlays

9:55 am Consumer Sentiment

10:00 am New Home Sales

10:00 am Pending Home Sales

10:30 am EIA Petroleum Status Report


Markets Closed for Thanksgiving Holiday


9:45 am Chicago PMI

1:00 pm Early market close

As far as entry plans for a new weekly SPX Iron Condor, I will see how the market is reacting to the flurry of economic news during the shortened trading week. If things look relatively calm, I may consider entering on Wednesday for the December 1 cycle. Otherwise, we will look at entering Friday morning as long as the conditions are within the guidelines.

Position updates will be posted as appropriate.

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

Dot Hazlin