As expected my SPY(134.54 +1.86) order didn’t fill today and the IWM(82.95 +1.77) 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!

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!

Who knows any more   It looks to me as though we are getting close to a very important cross roads here in the /NQ and /ES. I’ve jumped into a slew of SPY Calls to balance off the Puts that are open right now. The papermoney page is up to date.

The futures are up tonight and if we break higher, I’m going to start shorting puts against my JUN’s to capture some of the volatility we have right now. I don’t have any charts to offer tonight as I’m running short on time.  Class has started up again and I’ve been buried in Macro textbooks and statistical formulas.

For some good stuff, head over to The Slope of Hope, and Evil Speculator.  Both of those sites have some excellent analysis on what is happening right now.