Steady as she goes ; daily and weekly gains achieved by the broad market.
The market continues to creep higher as we enter the summer season. The benchmark index SPX closed yesterday +.16%, 3.80 points at 2438.30. This represented a weekly gain of +.2%.
Below is the open position status:
SPY Monthly Iron Condor for July
This position was opened on Monday, June 12; details below:
- SOLD SPY July 248 Call, .46 credit.
- BOUGHT SPY July 253 Call, .08 debit.
- SOLD SPY July 234 Put, 1.23 credit.
- BOUGHT SPY July 229 Put, .79 debit.
Order was filled as an "Iron Condor" for $.82 net credit (all four legs) .
Margin/Risk is calculated by the width of the wings ($500), less credit received.
Margin/Risk for this trade: $418.
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 July Iron Condor:
Below is the SPY chart showing the short strikes:
SPY 6 month chart
As of the close, Think or Swim is showing the position +$38, very close to our target gain of $41.
SPY closed Friday at 243.19, up +.06. With any help from the market, we may be able to exit for target gain next week.
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 Monthly Iron Butterfly for July
This position was opened on Monday, June 19; details below:
- SOLD RUT July 1410 Call, 23.30 credit.
- BOUGHT RUT July 1460 Call, 4.20 debit.
- SOLD RUT July 1410 Put, 18.85 credit.
- BOUGHT RUT July 1360 Put, 6.90 debit.
Order was filled as an "Iron Condor" for $31.05 net credit (all four legs).
Additional Order to cut Deltas on upside:
BOUGHT RUT July 1480 Call
Order for extra long call was filled for $1.70.
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: $2,065.
Target Gain: 5% of the gross margin ($250/contract)
Max loss: 10% of the gross margin ($500/contract)
Below is the risk graph as of the close Friday:
RUT July Iron Butterfly:
Think or Swim is currently showing the position +$25. RUT closed Friday at 1414.78, up +10.24 points or .73%.
The adjustment trigger points for this position are if RUT moves up or down 10 points from the center of the Iron Butterfly. Adjustment trigger on the call side would be if RUT reaches 1420. Since we have the extra long call, we can be a little patient with the adjustment depending on the position status and overall market conditions. The downside adjustment would be at approximately 1400, depending on market conditions and position status at the time the trigger is reached. As the trade is also a bit more "friendly" on downside moves, we can be patient as well on making the downside adjustment if the trigger is reached. Remember these are guidelines, not concrete rules, and can be modified as a trader chooses depending on market opinion.
Next week's economic news, is summarized below:
8:30 am Durable Goods Orders
10:00 am Consumer Confidence
8:30 am International Trade-in Goods
10:00 am Pending Home Sales
10:30 am EIA Petroleum Status Report
8:30 am GDP
8:30 am Jobless Claims
8:30 am Personal Income & Outlays
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,