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.
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.
ReplyDeleteThe 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.
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