March 23, 2016 at 11:12 am #5106
no but if you want to put similar then you can follow this part
“10-13 delta put for the bull put spread and about a 10 delta call for the bear call spread.”
but if you do not understand that, wait until the next Igor May trade.March 23, 2016 at 11:57 am #5112
Started a small position in MAY monthly cycle – MAY 1850/1860/2140/2150 for $1.95 credit. Short call delta 11 and short put delta 12March 23, 2016 at 11:57 am #5113
Nishant, don’t push this trade in May2, May monthly cycle may be a better idea. Look for a 10 delta call and a 10 delta put, 10 point wide spread, for a total credit of 1.80 or so.March 23, 2016 at 12:06 pm #5114
Thanks Igor, Can I place this trade
Sell -1 Iron Condor SPX May 16 2140/2150 1830/1820 CALL PUT for 1.80?March 23, 2016 at 1:01 pm #5115
It looks like the mid price for this IC is around 1.50 or so. You want to look for .90¢ credit for both a bull out and bear call spreads, total of 1.80March 23, 2016 at 1:15 pm #5116
Thanks Igor I got filled at 1.80March 24, 2016 at 3:52 pm #5132
i am wondering what makes you choose a balanced vs an unbalanced IC at any given moment?
To me it feels like a nightmare when a call side is under attack vs a put side and is nearly 2 x a loser from a risk mgmt POV vs puts..
That makes me want to do 1/2 size on the calls but even more we know the market spends most of its life going up anyway which confirms the condition making me think why anyone would ever NOT want to do unbalanced unless we in a clear bear market
Other reasons to do unbalanced are getting more delta neutral implying perhaps when u do balanced you are bearish?March 24, 2016 at 4:07 pm #5133
Because of the skew, IC will always start short delta. Getting short delta after the market sold off 200 points isnt the best scenario. Going unbalanced with intentions to roll up and add size to match put spreads is one way to put on a less bad IC. It doesn’t feel great when you put the trade on and 3 days later your short call goes from 10 delta to 18 but if you have a plan you must stick to it and execute regardless what you think the mkt might do next. I like balanced IC over unbalanced and often will use OTM options to re-balance NET position delta. A massive uptrend since 2013 made iron condors less fun because of the constant risk on the upside, but I think that’s changed sometime last year.March 26, 2016 at 11:54 am #5143
RE: SPX MAY 1830/1820/2140/2150 Iron Condor
It looks like mid prices are really pricing in a 3-day W/E, but if you can close for 1.40 debit (assuming your entry was 1.80 credit) that’ll be a 20% of credit received in less than 1 week. It doesn’t mean that you HAVE TO go and close it, but this trade is way ahead of ‘normal’ decay of IC premiums. I have a cheatsheet that shows decay of premium for short strangles over different time frames: https://docs.google.com/spreadsheets/d/1gGyg_JuCF94Bmo7O8nGsxsUzPEUw3PT2Tjj1i4leQZQ/edit#gid=0
This is just a guide, if IC is showing 20% of max profit in 10 days or less that means this trade can be exited and re-entered to maximize return on risk. Hope this helps.March 26, 2016 at 12:53 pm #5144
Thank you for sharing your trades. I have a couple of general questions about the process of trade selection and execution.
1) What factors do you consider when deciding whether to trade SPX or RUT?
2) When initiating a new Iron Condor, do you usually place separate orders for the call spreads and the put spreads?
With appreciation for your helpfulness,
KimberlyMarch 26, 2016 at 1:12 pm #5145
I don’t feel there’s a big difference between IC in RUT or SPX. I do like SPX more because they list more weekly options. As far as breaking up put spreads and call spreads, I like to put on Iron Condors as one trade even though getting a fill will require sitting on an order for a while. If I don’t get a fill fairly quick, I will offer the same trade but keep an eye on the price of each spread. If I’m trying to fill a 1.80 credit, I don’t want to get 1.40 for one side and .40c for the other. If that happens and mid prices shows 1.40 for one side and .40c for the other, I will move the strikes to where mid prices are close to .90c for each spread. So leaving orders GTC is a bad idea because I want the premium to be balanced between bull puts and bear calls.March 29, 2016 at 10:21 am #5167
What do you think about this trade? I have it like in the picture.
Do you have an objective? Would you recomend to reduce positions?
Have a great day!March 29, 2016 at 10:28 am #5174
Is this trade in MAY monthly cycle? Look at each spread separately, what was entry credit vs where mid price is now? How long have you had this trade on?March 29, 2016 at 12:07 pm #5183
SPX MAY Iron Condor:
Hi Igor, Did you get filled at 1.80? I am not getting filled do you think I should change the strikes?March 29, 2016 at 12:11 pm #5184
I did fill 1.80 (1.10 for the calls and .70c for the puts). Dont force this trade, if bear calls trade 1.30 then you should look to change strikes. Right now mid price for this IC is around 1.90
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