SPX closed +1.09% of the back of the news that the FED left interest rates unchanged and the market now thinks we’ll see maybe a hike at the December meeting. SPX was trading around 2185 before the recent spike in volatility that was due to fears that we’re going to see a rate increase during September meeting. With that said, we very well may be on the way to test All Time Highs around 2200.
Now, if you’re asking if this is an ideal time to initiate an Iron Condor, there isn’t a simple Yes or No answer. This can play out one of two ways. If SPX runs to 2200 by the end of next week, it’ll hurt an IC because this trade has NET short DELTA, initially. If SPX sells off and volatility spikes, it’ll hurt an IC because this trade is short VEGA. However, we put these trades on regardless of where volatility rank is or where the spread between Implied and Historical volatility is. We plan our traded before entry, identifying adjustment points and setting a potential stop out levels. We recently put on 2 Iron Condors in November expiration:
We know when we need to adjust based on short strikes, when we need to cut the position off based on P/L of the trade and what our potential profit targets are. If you have any questions feel free to reply here or you can stop by the Chat and join us for live interaction.