Friday represented the 13th day in a row that SPX moved less than 0.5%; is that a signal that things may change?
The broad market ended the trading week slightly lower Friday, logging in the first weekly retreat in almost a month. The benchmark index SPX closed down 3.54 points, or .2%, at 2390.90. Analysts attribute yesterday's drop to the political uprisings surrounding the firing of FBI Director James Comey.
We only have one position on this weekend. We were given a gift of an early exit on the weekly SPX Iron Condor. The trade was entered on Thursday, and yesterday our closing order filled for target gain.
SPY Iron Condor for June
This monthly position was opened on Monday, May 8. Details below:
- SOLD SPY June 245 Call, .65 credit.
- BOUGHT SPY June 250 Call, .15 debit.
- SOLD SPY June 230 Put, .87 credit.
- BOUGHT SPY June 225 Put, .51 debit.
Order was filled as an "Iron Condor" for $.86 net credit (all four legs) .
Margin/Risk is calculated by the width of the wings ($500), less credit received.
Margin/Risk for this trade: $414.
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 June Iron Condor:
Below is the SPY chart showing the short strikes:
SPY 6 month chart
SPY closed Friday at 238.98; this position is currently +$18, so off to a good start.
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:
10:00 pm China's Industrial Production Report
8:30 am Empire State Manufacturing Index
10:00 am Housing Market Index
8:30 am Housing Starts
9:15 am Industrial Production
10:30 am EIA Petroleum Status Report
8:30 am Jobless Claims
8:30 am Philadelphia Fed Business Outlook Survey
9:15 am Fed's James Bullard speaks
Next week is the planned entry window for the RUT Iron Butterfly for June. Monday will be 31 days prior to expiration, so we will look to enter sometime in the coming week depending on market conditions and available credit.
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,