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Recommendation for RUT iron condor initiated on 15 May 2007 |
| 14 Jun 2007 Close Recommendation for RUT (Russell 2000 Index) Iron Condor initiated on 15 May 2007 Trade Summary
Trade Analysis The last day of trading for RUT options is on Thursday. The settlement price will be announced on Friday morning. Normally we'll close up the position to prevent any chance of risk to our profit. In fact, we were trying to close this position up for days. However, we simply can't get it filled and it defeats any purpose to close it today. Since we had an adjustment for this condor that cost us $0.70, letting the position to expire worthless can save us the commissions that will eat into our already-reduced profit. At the current price of 838.18, RUT is trading more than 40 points away from our short call of 880 and almost 60 points away from our short put of 780. It is very unlikely that RUT will move up to beyond 880 or crash to below 780 by closing today. Therefore, it will be very unlikely that tomorrow's settlement price will be anywhere near our short options. On hindsight, there was no need for the adjustment we did on 31 May. But, everything is 20/20 on hindsight. We have a plan and we follow the plan. We currently have another RUT condor added recently. It is starting to decay according to plan. Good trading, 31 May 2007 Roll Call Spread recommendation for RUT (Russell 2000 Index) Iron Condor initiated on 15 May 2007 Trade Summary
Trade Analysis RUT has reached its multi-year high. Our alarm rang when RUT was trading at 840. We held on to it while we reassess the market. There is a higher chance of RUT climbing to a new higher high than RUT dropping to a new low. Currently it is trading at 845 and knowing how strong the bulls can be, we decided to do some adjustment to safeguard our profit. We can close up the class spread altogether for $1.15 and we would have practically close the entire position with a $0.85 profit. However, we decide to roll our call spread higher. Rolling the call spread up is less costly and thus we can keep more of our profit. Market has been erratic lately. There is no clear trend of where the market is heading currently. As such, we will trade very lightly. Now is too late for a Jun Iron Condor and too risky for a double diagonal with 49 days out. Gary **********Trade History********** 15 May 2007 RUT (Russell 2000 Index) Iron Condor initiated on 15 May 2007 Trade Summary
Trade Analysis This is an iron condor that offers a less than 1:1 risk/reward. To be more specific, we are risking $800 to make $200. Risk is $800 and reward is $200. Of course for less than 1:1 iron condors, we will keep a close look at the price. As of now, we are about 50 RUT points away for the upside risk and about 40 points away for the downside risk. This 90-point-wide iron condor currently has a 66.21% chance of being successful. We will set our alarm at 840 and 810, which are 30 points away from our short options. We'll sit up and watch closely when RUT hits 840 or 810. You may want to read up more on how we deal with iron condors that are less than 1:1 here.
Although the best price is listed at $2.20 credit, we couldn't get this condor filled at $2.20. So we decided $2.00 is not too bad a deal. We all know how difficult it is to get filled on RUT. We like RUT because it moves rather slowly, which is good for iron condors. With 30 days to go, we should be able to profit from this trade. Gary Founder,
Head Trader of MarketNeutralOptions
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