![\"spx-risk\"](\"http:\/\/trades.investingwithoptions.com\/files\/2014\/10\/spx-risk1.png\")
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Update: Oct 30th, 2014<\/h2>\n
SPX has rallied hard and looks ready to break above the 2000’s again.<\/p>\n
If I had done a normal iron condor I would be in a lot of pain, but because I recognized that the upside risk is the biggest risk, I’m still sitting right around breakeven.<\/p>\n
The call spread (2040\/2050) does look a little tenuous here, so what we are going to do is ROLL and ADD to our call spreads.<\/p>\n
Do note that this does NOT change any of the margin characteristics of the trade. We are just adding a little more upside risk in exchange for widening out our breakeven and getting better odds.<\/p>\n
Here’s the trade:<\/p>\n
Buy to close SPX Dec 2040\/2050 call spreads at 2.80<\/p>\n
Sell to open FULL SIZE Dec 2070\/2080 call spreads at 1.50<\/p>\n
This keeps us around the same directional exposure but it doubles our theta.<\/p>\n
The upside risk still is the biggest risk here. If I need to make another adjustment, I will roll the put spread higher for a credit and use that cash to buy some hedges.<\/p>\n
<\/p>\n
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Update: Dec 4th, 2014<\/h2>\n
This is yet another iron condor that’s gotten away from me with respect to the upside risk. I’m now going to “lock in” a higher loss to reduce mt directional exposure and increase my theta.<\/p>\n
First trade:<\/p>\n
1. Buy back the Dec 1700 put @ 0.20 – this is done to free up margin. You don’t have to close out the entire put spread, just the short option.<\/p>\n
2. Sell to open Dec 2000\/1990 put spread for 0.70. This will reduce our odds but help to pay for the call side roll.<\/p>\n
3. Buy to close Dec 2070\/2080 call spread AND
\nSell to open Dec 2090\/2100 call spread
\nDebit: 2.50<\/p>\n
Trade part 3 is known as a “condor roll” where we are effectively rolling the spread higher. It will reduce our upside risk, increase our odds, but basically lock in a loss.<\/p>\n
<\/p>\n
\n
Update: 12\/19\/14<\/h2>\n
Trade Expired Worthless.<\/p>\n
\n
Margin and P\/L<\/h2>\n
Initial Margin<\/strong> First Roll<\/strong> Second Roll<\/strong> Put Spread #1 P\/L Call Spread #1 P\/L Put Spread #2 P\/L Call Spread #2 & #3 P\/L Total P\/L Return on Risk: -3.8%<\/p>\n","protected":false},"excerpt":{"rendered":" It doesn’t feel like it, but December is only 2 months away. That means it’s time to deploy some iron condors. Sell to open Dec 1700\/1690 bull put spread for 1.00 Sell to open Dec 2040\/2050 bear call spread for 1.00 — HALF SIZE This simply means for every 2 bull put spreads you sell, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":2,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":1,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":""},"categories":[29,27],"tags":[],"_links":{"self":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/9451"}],"collection":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/comments?post=9451"}],"version-history":[{"count":4,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/9451\/revisions"}],"predecessor-version":[{"id":10031,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/9451\/revisions\/10031"}],"wp:attachment":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/media?parent=9451"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/categories?post=9451"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/tags?post=9451"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nSpread Width: 10000
\n10 Put Spreads @ 1.00 = 1000
\n5 Call Spreads @ 1.00 = 500
\nMargin: 8500<\/p>\n
\nClose 5 Dec 2040\/2050 Call Spreads @ 2.80 = +1400
\nOpen 10 Dec 2070\/2080 Call Spreads @1.50 = -1500
\nNew Margin: 8400<\/p>\n
\nClose 10 Dec 1700 Put @ 0.20 = +200
\nOpen 10 Dec 2000\/1990 Put Spread @ 0.70 = -700
\nRoll 10 Call Spreads @2.50 = +2500
\nNew Margin: 10,400<\/p>\n
\nSell to Open 10 SPX Dec 1700\/1690 Put Spread @1.00
\nClose 1700 Put @0.20
\nProfit: 0.80
\n+$800<\/p>\n
\nSell to Open 5 SPX Dec 2040\/2050 Call Spreads @1.00
\nClose @2.80
\nLoss: 1.80
\n-$900<\/p>\n
\nSell to Open 10 SPX Dec 2000\/1990 Put Spreads @0.70
\nExpired Worthless
\nProfit: 0.70
\n+$700<\/p>\n
\nSell to Open SPX Dec 2070\/2080 Call Spreads @1.50
\nRoll to SPX Dec 2090\/2100 Call Spread @2.50
\nExpired Worthless
\nLoss: 1.00
\n-$1,000<\/p>\n
\nPut Spread #1: $800
\nCall Spread #1: -$900
\nPut Spread #2: +$700
\nCall Spread #2 & #3: -$1,000
\nTotal P\/L: -400<\/p>\n