Trade Discussion

IncomeLab Forum Forums Income Lab Trade Discussion

This topic contains 164 replies, has 18 voices, and was last updated by  Igor 2 years, 12 months ago.

Viewing 15 posts - 31 through 45 (of 165 total)
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  • #5106

    Igor
    Keymaster

    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.

    #5112

    Igor
    Keymaster

    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 12

    #5113

    Igor
    Keymaster

    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.

    #5114

    Igor
    Keymaster

    Thanks Igor, Can I place this trade

    Sell -1 Iron Condor SPX May 16 2140/2150 1830/1820 CALL PUT for 1.80?

    #5115

    Igor
    Keymaster

    It looks like the mid price for this IC is around 1.50 or so. You want to look for .90ยข credit for both a bull out and bear call spreads, total of 1.80

    #5116

    Igor
    Keymaster

    Thanks Igor I got filled at 1.80

    #5132

    Igor
    Keymaster

    Hi Igor,

    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?

    #5133

    Igor
    Keymaster

    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.

    #5143

    Igor
    Keymaster

    RE: SPX MAY 1830/1820/2140/2150 Iron Condor

    Nishant,

    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.

    #5144

    Igor
    Keymaster

    Igor,

    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,
    Kimberly

    #5145

    Igor
    Keymaster

    Kimberly,

    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.

    #5167

    Igor
    Keymaster

    Hi Igor,

    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!

    #5174

    Igor
    Keymaster

    Jose,

    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?

    #5183

    Igor
    Keymaster

    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?

    #5184

    Igor
    Keymaster

    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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