Despite the uncertainty over the French election this weekend, the broad market managed to squeak out gains for the week.
The benchmark index SPX closed down 7.15 points yesterday at 2348.69, recovering late in the day from an 11 point drop after news that President Trump is planning to announce a tax reform plan next week. SPX posted a gain for the week of +.9%.
Below is the open position status:
SPX Weekly Iron Condor for the April 28 cycle
This position was opened Thursday, April 20; details below:
SOLD SPX April 28 2395 Call, 1.65 credit.
BOUGHT SPX April 28 2405 Call, .85 debit.
SOLD SPX April 28 2265 Put, 4.00 credit.
BOUGHT SPX April 28 2255 Put, 3.40 debit.
Order was filled as an "Iron Condor" for $1.40 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: $860.
Target Gain: 7% of margin/risk or $60.
Max loss: 10% of margin/risk or $85.
Below is the risk graph of this week's position as of the close Friday:
SPX April 28 Weekly Iron Condor:
Think or Swim is showing the position -($40) at the close, but I did notice prices were quite erratic during the day yesterday so I don't have a lot of confidence in that after-hours figure. The debit to close on TOS is $1.80. Our order remains in place to exit the position when the debit reaches $.80 which would be target gain, or if the loss reaches 10%.
Below is the SPX chart showing the short strikes:
SPX 6 month chart
SPY May Monthly Iron Condor
This position was opened on Monday, April 10; details below:
- SOLD SPY May 243 Call, .54 credit.
- BOUGHT SPY May 248 Call, .10 debit.
- SOLD SPY May 225 Put, 1.02 credit.
- BOUGHT SPY May 220 Put, .65 debit.
Order was filled as an "Iron Condor" for $.81 net credit (all four legs) .
Margin/Risk is calculated by the width of the wings ($500), less credit received.
Margin/Risk for this trade: $419.
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 May Iron Condor:
As of the close Friday, Think or Swim is showing the position a bit above breakeven, +$27.
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.
RUT May Iron Butterfly
This position was opened on Tuesday, April 18; details below:
- SOLD RUT May 1360 Call, 26.70 credit.
- BOUGHT RUT May 1410 Call, 6.90 debit.
- SOLD RUT May 1360 Put, 29.00 credit.
- BOUGHT RUT May 1310 1240 Put, 13.40 debit.
Order was filled as an "Iron Condor" for $35.40 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT May 1460 Call
Order for extra long call was filled for $1.00.
Margin/Risk is calculated by the width of the wings ($5,000), less credit received, plus the cost of the extra long call.
Margin for this trade at entry: $1,560.
Target Gain: 5% of the gross margin ($250/contract)
Max loss: 10% of the gross margin ($500/contract)
On April 20 RUT reached the upper adjustment trigger, and was adjusted as follows:
Upside Adjustment April 20:
BOUGHT RUT May 1360 Call, 35.70 debit.
SOLD RUT May 1410 Call, 9.60 credit.
SOLD RUT May 1380 Call, 23.20 credit.
BOUGHT RUT May 1430 Call, 4.40 debit.
Net debit (all four legs): $7.30
The position summary after the adjustment is as follows:
SHORT May 1380 Call
LONG May 1430 Call
SHORT May 1360 Put
LONG May 1310 Put
LONG May 1460 Call bought at trade entry to cut position delta.
The position is now a 20 point wide Iron Condor.
Below is the risk graph as of the close Friday:
RUT May Iron Butterfly:
Think or Swim is currently showing the position -($48), quite short delta so a slight pullback should help the position.
The next adjustment trigger point according to the guidelines is at either short strike, depending on overall position status and market conditions. With RUT closing at 1379.85 on Friday, we may wait a bit beyond 1380 before making a second upside adjustment. The expiration breakeven is at 1407 so we have a bit of leeway.
Next week's economic news is highlighted below:
All Day French Presidential Election
8:30 am Fed's Neel Kashkari speaks
9:00 am S & P Case Shiller HPI
10:00 am New Home Sales
10:00 am Consumer Confidence
10:30 am EIA Petroleum Status Report
8:30 am Durable goods Orders
8:30 am International Trade-in Goods
8:30 am Jobless Claims
10:00 am Pending Home Sales
8:30 am GDP
9:45 am Chicago PMI
10:00 am Consumer Sentiment
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,