I was filled for an additional 25 contracts to the May 2010 IWM(82.68 +0.00) Iron Condor position in the paper money account.  This time the fill was for $0.55 credit, a reasonable premium to the original position.  I’ve gone ahead and adjusted my strike prices for the SPY(134.45 +0.00) order that is outstanding; these have been moved to 124/126/112/110 for a $0.50 credit, this order may fill if implied volatility spikes up nicely.

As of this evening the IWM position is profitable to the tune of a whooping $12.50! As with any position with 44 days till expiration, I’m not expecting much from it today. As you can see from the risk profile on the left, this position won’t do much until late April into Early May.  At that point, assuming the IWM hasn’t moved much I may unwind to remove risk and capture a nice return on capital at risk ($15,000).

It’s time to let time do its magic work.

As expected my SPY(134.45 +0.00) order didn’t fill today and the IWM(82.68 +0.00) did.  I’ve placed an order for an additional 25 contracts of the IWM condor at $0.55 credit; if these fill I will be quite happy with that price.  Here is the trade:

SOLD -50 IRON CONDOR IWM 100 MAY 10 73/75/63/61 CALL/PUT @.50

Here is a bit of analysis on the trade.  The strikes are based primarily on the standard deviation of the IWM.  I’ve highlighted the trade range on the image to the right and you can see in the profit graph below that my break even points (including commissions) are slightly outside of 1 σ move down, and just inside a 1 σ move up. For those of you that are now slightly confused, the lower case Sigma, or σ, is a symbol that represents the standard deviation.

These probabilities are based upon the price at May expiration of the IWM.

The probable range of prices IWM will touch between now and then is quite a bit higher; between about 60 to roughly 77.  This is a risk that will have to be managed as we move along and the IWM moves up and down.  My intent is to adjust as little as possible and just let the greeks do their work.  However, should adjustment become necessary, I am not adverse to getting my hands dirty!

Now that I’ve finally gotten everything closed out, it’s time to get the Condors rolling.

I’ve thrown two orders out into the papermoney portfolio for a 50 lot Iron Condors on the IWM(82.68 +0.00) and the SPY(134.45 +0.00).  The IWM Condor should get filled fairly quickly, however the SPY has been put in well above the market/mid price and likely won’t get filled.

Here are the quick details on the orders:

• IRON CONDOR SPY 100 MAY 10 124/126/109/107 CALL/PUT @ .50
• IRON CONDOR IWM 100 MAY 10 73/75/63/61 CALL/PUT @ .50

Both of these positions sit about 1 standard deviation away from the current price of the underlying and provide a fairly healthy return on capital at risk.  These are a lot closer than most of the Condors that I’ve put on in the past.  I’m experimenting with getting closer to the underlying to increase the return, while not dramatically increasing risk.  I’m also planning to exit these rather than letting them expire worthless, so only time will tell how things work out.

The size of the order is a little small based upon the risk management strategy that I’m planning to employ in this account.  Right now, these orders will require about $7,500 in risk capital.  I’m planning to allocate around 1/2 of the account across 4-5 positions in a month.  That means that I need to allocate roughly $10,000-$12,500 to each trade.  I’m fishing right now to see what fills, if the IWM position fills, I’ll likely add another 25 or so contacts.

I did throw a few of these out in another account last week, currently they are up quite nicely and appear to be performing as expected.  I’ll post an update once I get fills etc, along with a little more analysis.

*REMEMBER: This is FAKE money… If it goes poof, then who cares.  :) Read the disclaimer on the website, it is VERY important that you read it – period.

I’m a very busy person.  In my real accounts, I keep a very good eye on my money and have been generating handsome returns over the past few years.  Sadly, this hasn’t played out on the paper money account!

Rather than play around with short calls and puts and all of that fun stuff on individual equities; I’m going back to my old habits and I’m going to start to manage a larger portfolio of Iron Condors in the papermoney account. In all honesty… I hate individual equity positions.  They are horribly volatile, subject to firm risk and there is just too much to pay attention too.  With all of those problems, I just don’t enjoy managing money that way…

I’ve put in orders to basically get flat before I open up any of the Iron Condors.  The account will be down roughly 10% from the initial balance of $100,000, so I’ll be starting at a disadvantage.  No worries, that just means that I might have an incentive to pay attention this time!  Back to the indices, and non-directional plays. Sweet!

Remember, this is play money.  It isn’t real.  These trades are not real.  In fact, I am quite prone to ignore this account and about 6 months later start it up again.  Please, make sure to use your own brain to determine how to allocate and manage your money.  This is just for fun, a touch of education, but most definitely not investment advice.

Oh yeah, I’m going to play around with some positions that I would not have normally done in the past.  We’ll see what happens!

Well, it has been quite some time since I have placed any trades. This year has been a hectic one with a new position in my company and many life changes.

I think the market is finally in a spot were I am comfortable putting my money on the line, as a result I threw out a few paper money positions. Today I opened the following two positions:

• RUT Jul 2007 760/750 890/900 Iron Condor
• Sold 25 Contracts for $ 2,475 Credit
• Risk ~ 15.5%

• SPX Jul 2007 1435/1430 1575/1580 Iron Condor
• Sold 25 Contracts for $ 2,425 Credit
• Risk ~ 8.7%

Both of them appear to be fairly conservative. The Russell position has the most upside risk and I’ll have to keep an eye out it. Currently the RUT is trading at around 830, with a high of 856.39. There is a possibility that it could break out to 890, I just don’t see it happening in the next 23 days.

I put in an order today to finish the RUT condor for November. The total condor is now a 740/730 810/820. I got a fill for $0.24 on 50 contracts. I’ll keep an eye out next week, if the RUT moves down a lot, I’ll have to close out an lose a bit – I don’t expect that to happen though

Over the past few days I’ve been able to secure fills on two August positions. The first in an SPX Iron Condor and the second position was a result of two RUT Iron Condors. I’ll run down the positions here; however, they are also reflected in the portfolio section of the site.

SPX Iron Condor

• Sold 30 SPX August 1315/1325 1175/1165 Iron Condors @1.20
• Credit $3,600, Commission: ($189.95)
• Margin: $30,000
• ROI: 11.3%

RUT Iron Condor

• Sold 30 RUT August 740/750 600/590 Iron Condors @1.26
• Credit $3,780, Commission: ($189.95)
• Sold 30 RUT August 740/750 610/600 Iron Condors @1.27
• Credit $3,810, Commission: ($189.95)
• Final position is Unbalanced 60×740/750 Call Spread and 30×610/590 Put Spread – Iron Condor
• Margin: $60,000
• ROI: 12.11%

I’m still holding on a choppy but basically neutral to bullish market over the near term. These positions both appear to have great risk/reward characteristics and I’m confident that by the end of September we will be back into positive territory after the beating we took in June!

I did place a very similiar trade to the Russell position above in my personal account. I trade was opened using two Vertical Spreads as I was unable to get a live fill for the full Iron Condor.

Today I was filled on the Call side of my March 2006 RUT Iron Condor.

• Mar 2006 RUT 780/790 Call Spread; completing an Iron Condor
• Sold 780 Call & Bought 790 Call

• Opened: Sold on 2/23/2006 for $0.15 Credit

• Reason: This completes a 660/670 780/790 Iron Condor. Using a three month window, the strike prices of 670 and 780 are more than two standards of deviation out so I’m feeling pretty confident with this one.
• The Russell is at 738 today and looks like it is still in the choppy pattern.
• Notes: The money is only on the table for 21 days, so this one should be nice. ROI will be about 5.5% , risk is $1000 per contract.

• Risk: As stated in the initial trade, the risk is about 3.7% on the bottom and 5.7% on the top, that is a total of about 9.4%, meaning that I have > 90% chance of profitability.

Well, its back to the races! Expiration Friday is behind us and last month was a good one. I only had one trade on, but it was a very successful one I’m out looking for new candidates for the march cycle and think I might have found a good one. I’m looking at a position like this Here are the details:

• Mar 2006 RUT 660/670 Bull Put Spread
• Bought 660 Put & Sold 670 Put
• Opened: Sold on 2/21/2006 for $0.40 Credit

• I will leg into a full Iron Condor later this week if the markets permit

• Mar 2006 RUT 660/670 780/790 Iron Condor
• I’m trying to get about $0.55 for the Condor. The ROI will only be 5.5%; but then again my money will only be on the table for 23 days

• The order for the put spread is out for a $0.40 credit. We’ll see

Original Notes

I’m going to try and leg into this by selling the 660/670 Put Spread first. If this gets filled, then I will put in the sell order for the 780/790 Call Spread. My thoughts here are as follows:

• 1. The bulk of the profits for this trade will come from the 660/670 Spread.
• 2. Using thinkorswim’s awesome trade analysis software, I was able to calculate an approximate risk of about 3.68% on the Put Spread. The Call Spread is a bit higher at about 5.63% but that’s still pretty good!
• 3. If I don’t get a fill on the Put side of this, then I’ll start looking for an April position that has a higher ROI. Typically I am looking for something in the 8-9% range or higher!!.

I’ll post updates as the trade progresses

Update
I got the fill for the 660/670 Put Spread. I’ve placed an order for the Call Spread and am waiting for a fill.

Update
Well, the market closed and I still didn’t get a fill for the RUT Condor.  I’m going to modify my order to be GTC for a few days and see if I can catch a fill on a market swing. I’ll have to keep an eye out to make sure that I don’t loose potential premium if the market moves up quickly.

I’m also updating the initial trade information to reflect what happened.

I was able to get a fill on a good trade to finish my March 2006 SPX Condor. Here are the details:

• Mar 2006 SPX 1340 /1355 Call Spread; completing an Iron Condor
• Sold 1340 Call & Bought 1355 Call

• Opened: Sold on 1/25/2006 for $.60 Credit

• Reason: This completes my trade from the 20th. I think this number is pretty safe. The SPX would have to go much higher than it has in the past 4 years or so to break through
• Final position is a Mar 2006 SPX 1175/1190 1340/1355 Iron Condor
• Total credit received $1.80