Recommended trade entry for October 23
Option Code: SPX151030
Expiration Date: Friday, October 30.
Recommended Trade Entry:
In my post earlier this morning, it did not look like we would be able to recommend a trade entry for today. Before the open, my broker's platform was calculating the one day standard deviation to be 14 points. Just a few minutes ago I re-checked the calculation, and the standard deviation is about 16 points so we are very cautiously entering the following position:
- SELL SPX October 5 2100 Call, currently $1.90. Delta of short call: .13.
- BUY SPX October 5 2110 Call, currently $.90.
- SELL SPX October 5 2000 Put, currently$ 1.90. Delta of short put: -.08.
- BUY SPX October 5 1990 Put, currently $1.40.
I am recommending a slightly lower delta on the short put to give a little more room to the downside this week.
It is recommended to place the order as a single entry: SELL " Iron Condor".
Current mid price for all four legs: $1.50. We recommend trying to get filled for the mid or a few cents below; $1.25 is the suggested minimum credit for this trade. Bid/ask prices can sometimes be wide, so there is no guarantee there will be a fill at the current mid price. Some traders may get filled at a better credit, others may have to cave in a bit to get the order executed.
Please note: Traders should always be aware of any news events that may cause a sudden move in the market. If that occurs, it is recommended to immediately cancel the working order until things settle. Depending on the move that may occur, the above strikes may need to be changed to appropriate strikes within the .10 - .14 range. It is each individual's responsibility to select the strikes they feel most comfortable with, depending on trading style and risk tolerance.
Update will be posted with exact position details when the trade is opened.
For those unfamiliar with the strategy, the trade management guidelines for all Couch Potato Trader strategies were updated on August 20, 2015, and can be found here:
Link to Articles
As always, stay keen on your risk management and trade carefully,