Political drama enters the arena to end the trading week.
The broad market closed mostly lower yesterday, as the US House Republicans pulled a controversial health-care bill from consideration after failing to secure enough votes to pass it. The news came just before the close of trading Friday.
The benchmark index SPX closed down 1.98 points, -.1% at 2343.98. This represented a weekly loss of 1.4%, the largest decline since November.
Below is the open position status:
SPX Weekly Iron Condor for March 31
This position was opened Friday, March 24; details below:
SOLD SPX March 31 2400 Call, 1.35 credit.
BOUGHT SPX March 31 2410 Call, .70 debit.
SOLD SPX March 31 2290 Put, 3.05 credit.
BOUGHT SPX March 31 2280 Put, 2.40 debit.
Order was filled as an "Iron Condor" for $1.30 net credit (all four legs).
Margin/Risk is calculated by the width of the wings ($1,000), less credit received.
Margin/Risk for this week's trade: $870.
Target Gain: 7% of margin/risk or $60.
Max loss: 10% of margin/risk or $85.
Below is the risk graph as of the close Friday:
SPX March 31 Iron Condor:
Think or Swim is showing the position is down -$45, but I think it may be incorrect data. I was watching the position shortly before the news came out and saw the debit was $1.00, then prices started jumping all over the place and TOS is showing a debit of $1.75. Our order remains in place to exit for target gain when the debit reaches $.70, or if the max loss reaches 10%.
Below is the SPX chart indicating the short strikes:
SPX 6 month chart
SPY April Iron Condor
This monthly position was opened on Monday, March 13. Position details are below:
- SOLD SPY April 243 Call, .54 credit.
- BOUGHT SPY April 248 Call, .08 debit.
- SOLD SPY April 228 Put, .98 credit.
-BOUGHT SPY April 223 Put, .61 debit.
Order was filled as an "Iron Condor" for $.83 net credit (all four legs) .
Margin/Risk is calculated by the width of the wings ($500), less credit received.
Margin/Risk for this trade: $417.
Target Gain: 10%of margin/risk.
Max loss: 15% of margin/risk.
Below is the risk graph of the position as of the close Friday:
SPY April Iron Condor:
SPY closed Friday at 233.86; our position is currently showing a gain of $24. Our order remains in place to exit when the debit reaches $.41 which would be target gain; or if the max loss reaches 15%.
Below is the SPY chart showing the short strikes:
SPY 6 month chart
The guidelines call for the position to remain open until target gain is reached, as long as SPY stays between the short strikes. They also call for exiting at the pre-set max loss, or if SPY reaches either short strike. It is recommended to have a "good to cancel" conditional order in to exit the position for target gain or max loss. Please follow your broker's specific guidelines on the setup of conditional orders as they can vary by broker.
Next week's economic news is summarized below:
1:15 pm Fed's Charles Evans speaks
6:30 pm Fed's Dennis Kaplan speaks
8:30 am International Trade-in Goods
9:00 am S & P Case Shiller HPI
10:00 am Consumer Confidence
12:45 pm Fed's Esther George speaks
1:00 pm Fed's Dennis Kaplan speaks
9:20 am Fed's Charles Evans speaks
10:00 am Pending Home Sales
10:30 am EIA Petroleum Status Report
11:30 am Fed's Eric Rosengren speaks
1:15 pm Fed's John Williams speaks
8:30 am GDP
8:30 am Jobless Claims
11:00 am Fed's Dennis Kaplan speaks
11:15 pm Fed's John Williams speaks
8:30 am Personal Income & Outlays
9:45 am Chicago PMI
10:00 am Consumer Sentiment
10:30 am Fed's James Bullard speaks
For those unfamiliar with the strategies we trade, the trade management guidelines for all the Couch Potato Trader plays can be found here:
Link to Articles
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,