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February Trade Cycle – Virtual Portfolio Update

 


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  1.  Put in an order to close Call credit spread  870/880 for .05 or less, Good till cancelled (GTC).


  2. Income Trader:  A question regarding how you deal with open positions in the last two weeks before expiry. I have my first February set (put on a few days before your official trade) with the short call at RUT 840 (delta right now 0.135). Obviously this spike above 800 today means there is still an outside shot we push to 840 by next Thurs (Feb 17 expiry). This is a 25 contract iron condor on this position, so in real money is not that big a commitment for me. Just wondering if you would still use your 0.21 delta as rolling guidance, or if you would close half or some other combination. Given I have a lot of margin, I was thinking that if the RUT continues higher for the rest of the week, I will possibly just roll into my March position.  Thanks in advance for your thoughts…


  3.  neverworkagain

    The 840 short call has a delta of .12, just monitor it closely and if it gets to a .15 delta, then I will go and buy insurance at the March 830 call. You have 25 contracts so you probably need about 2 of them. Then if the spreads hits point .20+, roll to the next .10 delta depending on the number of days to expiration and you need to 1.5X, to pay for the roll and still make it profitable. So for 25 you probably need about 37 contracts. Mean while your March 830, if it gets to the point you have to roll will have made you some decent money to help defray some of  your loses.

    If the RUT backs off the March 830 will not decay as fast and you can still close the entire spread at a limited profit. But no matter what you do, don’t let the 840 short call be breached.


  4.  The spike in the RUT this morning, presents an opportunity to close 705/715 put spread for .05 or less. Also those who did not close the Call spread when we did way earlier on, I sent an alert to close the Call spread at 870/880 (.02/.01 delta) for .05 or less. You can also close the insurance at 860 or you can leave it as a lottery play in case the RUT spikes up in the next two weeks.


  5. Income Trader:  Great! Thanks for the detailed answer. Very, very helpful.


  6.  Interesting long term look at current market valuation by Mish - 
    http://globaleconomicanalysis.blogspot.com/2011/02/negative-annualized-stock-market.html


  7. In your above trades aren’t selling the 880 calls for $1.35 and buying the 870′s for .075 on the 14th? Your spreadsheet  makes it look like you bought the 880′s on the 14th and on the 21st.


  8. Income Trader:  I am very interested in pursuing your strategy, but as I would be working with a smaller account I am concerned that commissions would eat into a substantial portion of the profits, especially if price movements necessitated numerous rolls.  Are commissions accounted for in your spreadsheets?  And if not, what kind of guidance can you give? Thanks.


  9. rdn4evr
    I played this strategy using only 8 contracts size, so you commit $8000 and get 800 initial credit usually. That should take care of commisions. Basically consider initial credit to be 10% of what you allocate and see if doing 2 rolls allows you to profit enough to overcome commisions and still have some left


  10. Income Trader is initiating the following Iron Condor trade for the March cycle in the virtual portfolio –

    Small Portfolio

    -15  RUT  MAR11  875C

    +15  RUT  MAR11  885C

    -15   RUT  MAR11  720P

    +15  RUT  MAR11  710P

    Net Premiums $1.15 to $1.25

    Large Portfolio

    -50  RUT  MAR11  875C

    +50  RUT  MAR11  885C

    -50   RUT  MAR11  720P

    +50  RUT  MAR11  710P

    Net Premiums $1.15 to $1.25



  11. New post so people can see it? My RSS feed would have missed the initiation since it doesn’t track comments…


  12. Hi Income tradeer what is the trick to get it filled, has been trying all morning iron condor but would not filled offer 1.35, even lower to 1.25 still no filled ???? thx ahead


  13.  Kwan -

    This was sent as an alert, so everyone (subscribers) should have received it in their email.


  14.  gucci -

    Trying filling each leg separately – Put Credit Spread and Call Credit Spread


  15. IncomeTrader – I did actually receive the alert, but didn’t realize it until after I had made the post.