Recommended trade entry for Friday, April 15
Option Code: SPX160422
Expiration: Friday, April 22.
Recommended Trade Entry:
- SELL SPX April 4 2110 Call, currently $2.15. Delta of short call: .14.
- BUY SPX April 4 2120 Call, currently $1.05.
Please note that the 2110 call is on the high end limit delta-wise according to the trade guidelines. I would have preferred to sell the next higher strike, 2115, but without giving up the downside room we could not get sufficient credit. It is recommended to proceed "with caution" on this week's trade, and consider trading a smaller size than usual if using live capital.
- SELL SPX April 4 2020 Put, currently $ 1.50. Delta of short put: -.08.
- BUY SPX April 4 2010 Put, currently $1.15.
It is recommended to place the order as a single entry: SELL " Iron Condor".
Current mid price for all four legs: $1.45. 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,