Tuesday, April 27, 2010

Iron Condor in SPY

So I am getting past my mental block when it comes to size. I am going to play with the iron condor a little more but with very small size when it comes to risk and contracts. Which will in turn lead to a low reward. But I want to get more experience with this type of trade and the only way I am going to do that is by trading it. So I am going to use the SPY for such a trade. I am going to sell the 123/124/115/114 Iron Condor for a $0.35 credit, leaving my risk at $0.65.

In the chart above I have highlighted in grey the area of profitablility for this trade. It is bascially profitable betwee 114.7-123.37. I think we have hit an intermediate top at 122.12 which kind of pisses me off as I got stopped out by $0.30 from my puts that I bought the other day which would now be in a profit of about $450. But that is niether here nor there, my timing was wrong. I also think that the January highs will be a very important level if we go down that far at around 115.

Here is the Risk Profile from TOS:

So lets see how this plays out. I think this is a good trade but also a mental accomplishment.


  1. Good for you, going back to something that hasn't worked yet but surely can't ever work if you don't try it again. Regardless of how it turns out, I agree with your set up and given the same risk/reward over time, this should be something you implement repeatedly as it just makes sense.

  2. The market is trading below my short put strike of 114 and I know longer think that this Iron Condor will finish ITM by Friday. So instead of realize the full max loss of $65 I have cut this trade early for a $25 loss.