Recommended trade entry for Friday, March 4
For those entering the trade below with live capital; it is recommended to trade in a much smaller size than usual. The market continues to be quite volatile, and we are treading very lightly on new trade entries for the short term weekly Iron Condor.
Option Code: SPXW160311
Expiration: Friday, March 11
Recommended Trade Entry:
- SELL SPX March 2 2035 Call, currently $1.75. Delta of short call: .10.
- BUY SPX March 2 2045 Call, currently $.90.
- SELL SPX March 2 1920 Put, currently $ 2.05. Delta of short put: -.08.
- BUY SPX March 2 1910 Put, currently $1.50.
Please note that I am recommending giving a bit more room on the downside on the put spreads, and selling a short with a delta of .08. After the runup this week, I felt I wanted to give a little more leeway over the weekend.
It is recommended to place the order as a single entry: SELL " Iron Condor".
Current mid price for all four legs: $1.40. 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 - .15 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,