2060 hit pretty quickly here.
What we are going to do here is reduce risk by buying calls in January. Since this iron condor is in december, by buying Jan calls we reduce our delta without removing the rewards we receive from time decay.
Current delta on 10 iron condors is 35. So buying a 20 delta call will cut deltas by about half.
Here’s the trade:
Buy to open SPX Jan 2160 Call @ 12.00
If you have smaller size, look to the SPY Jan 210 call and scale up until your directional exposure is cut in half.
Now, IF SPX CLOSES ABOVE 2100 here is what we will do:
1. Close out the long calls for a profit
2. Use those profits to roll the call side higher.
3. Roll the put side higher for a credit.
The technicals of the market show that there *should* be a brick wall coming up here for SPX, but we’ve seen before how the wall of worry can squeeze higher… I don’t want it to happen but we just need to be prepared for the possibility.