Need a volatility pop to get sufficient credit for new trade entry.
Today is normally the date we recommend entering the September SPY Iron Condor. However, as I look at trade setups and see the VIX at 11.59, I don't feel there is sufficient credit to enter a new position today. I had potentially set up the following trade:
SELL SPY September 224 Call, delta .15.
BUY SPY September 229 Call.
SELL SPY September 209 Put, delta -.19
BUY SPY September 204 Put.
Besides the fact that the current credit has a mid price of only .77 and our suggested minimum is .80, the width between the two short strikes is only 15 points. We normally like to have at least 16 - 17 points between the shorts to allow time for the trade to handle some market movement. In addition, the delta of the short 209 put is -.19, a bit on the high side after such a runup.
We will continue to watch for a reasonable trade entry setup and post updates accordingly. In the meantime, we must remain patient and not take on unnecessary risk.
As always, stay keen on your risk management and trade carefully,