StockFetcher Forums · Stock Picks and Trading · KEVIN'S OPTION TRADING THREAD (READ-ONLY)<< 1 2 >>Post Follow-up
Kevin_in_GA
3,982 posts
msg #132014
Ignore Kevin_in_GA
10/19/2016 3:10:20 PM

This thread will document my options trades going forward.

MY STRATEGY:

I sell Vertical Spreads and Iron Condors exclusively on the major indices (^SPX, ^NDX, ^RUT). With these indices, large price dislocations are relatively uncommon, unlike higher volatility stocks where earnings can cause a 5-10% move overnight. No more than two vertical spreads (or 1 Iron Condor) will be put in place on each index for a given option expiration date, with a maximum dollars at risk of no more than $5000. The condors are established with a delta for each wing of 0.10 or less. We will also use options with expiration dates no further out than two weeks - these options have a significant time decay, which as a seller works to our benefit.

These are fixed risk, directionally neutral option strategies that make money as long as the underlying index or stock does not move more than a specified amount prior to option expiration. As a seller of these contracts, time decay (theta) is on your side, and appropriate positioning of the puts and calls can provide a 90+% likelihood of the trade closing profitably. Anyone who has traded options knows that Iron Condors are one of the most reliable strategies for generating steady income growth regardless of market direction. This is not rocket science - it is a simple and straightforward application of statistics to market activity.

Kevin_in_GA
3,982 posts
msg #132015
Ignore Kevin_in_GA
10/19/2016 3:32:20 PM

SOLD 2 NDX NOV03 4525/4550/5000/5025 IRON CONDOR - NET CREDIT OF $1.99 PER CONTRACT

SOLD 5 RUT NOV04 1140/1150/1270/1280 IRON CONDOR - NET CREDIT OF $0.90 PER CONTRACT

SOLD 5 SPX NOV04 2035/2045/2200/2210 IRON CONDOR - NET CREDIT OF $0.95 PER CONTRACT

If all expire worthless (as hoped) these trades will net $1271.64 after commissions.


Kevin_in_GA
3,982 posts
msg #132071
Ignore Kevin_in_GA
10/23/2016 10:30:56 PM

NOTE - these trades are dependent on the markets trading within a range, and unusual volatility or price movements place them at risk. Therefore I will not be placing any Iron Condors other than these until AFTER the Election (these expire the week beforehand). No reason to put take the risk of a big market move in either direction.

Kevin_in_GA
3,982 posts
msg #132151
Ignore Kevin_in_GA
10/26/2016 7:50:04 PM

UPDATE: ALL TRADES ON TRACK

SOLD 2 NDX NOV03 4525/4550/5000/5025 IRON CONDOR - NET CREDIT OF $1.99 PER CONTRACT
DAYS TO EXPIRATION: 8
DELTA FOR PUT VERTICAL: -0.03
DELTA FOR CALL VERTICAL: 0.04

SOLD RUT NOV04 1140/1150/1270/1280 IRON CONDOR - NET CREDIT OF $0.90 PER CONTRACT
DAYS TO EXPIRATION: 9
DELTA FOR PUT VERTICAL: -0.06
DELTA FOR CALL VERTICAL: 0.03

SOLD 5 SPX NOV04 2035/2045/2200/2210 IRON CONDOR - NET CREDIT OF $0.95 PER CONTRACT
DAYS TO EXPIRATION: 9
DELTA FOR PUT VERTICAL: -0.05
DELTA FOR CALL VERTICAL: 0.02


Kevin_in_GA
3,982 posts
msg #132373
Ignore Kevin_in_GA
11/6/2016 11:12:23 AM

All Iron Condors closed profitably. I will not put on any option trades next week until the election is over and whatever market action happens as a result is in play. These trades do not like big volatility.

Kevin_in_GA
3,982 posts
msg #132596
Ignore Kevin_in_GA
11/17/2016 2:02:28 PM

SOLD 5 RUT DEC15 1180/1190/1390/1400 IRON CONDOR - NET CREDIT OF $0.99 PER CONTRACT

SOLD 5 SPX DEC15 2260/2270 CONDOR - NET CREDIT OF $0.67 PER CONTRACT


If all expire worthless (as hoped) these trades will net $833.78 after commissions. No put spread on the SPX, as the Fed decision is in the way. I'll likely buy-to-close the RUT put spread before the Fed meeting.


Kevin_in_GA
3,982 posts
msg #132661
Ignore Kevin_in_GA
11/21/2016 11:47:39 AM

SOLD 5 NDX DEC01 4660/4670/4960/4970 IRON CONDOR - NET CREDIT OF $1.018 PER CONTRACT

If all expire worthless (as hoped) these trades will net $509 after commissions.


Kevin_in_GA
3,982 posts
msg #132856
Ignore Kevin_in_GA
11/28/2016 11:12:13 AM

All vertical spreads are on track - the RUT Call vertical has been under some heat lately with the index up 16% in 16 days, but today's pullback helps to restore some balance to that Iron Condor (the put spread delta is at -0.02 but the call spread delta is still high at 0.19).

The 01Dec NDX Iron Condor is looking flawless.

Kevin_in_GA
3,982 posts
msg #132951
Ignore Kevin_in_GA
12/1/2016 8:32:47 AM

01Dec NDX Iron Condor expires worthless today - net gain of $509 after commissions.

Kevin_in_GA
3,982 posts
msg #133061
Ignore Kevin_in_GA
12/5/2016 6:56:08 PM

SOLD 5 RUT DEC15 1180/1190/1390/1400 IRON CONDOR - NET CREDIT OF $0.99 PER CONTRACT
DAYS TO EXPIRATION: 9
DELTA FOR PUT VERTICAL: -0.01
DELTA FOR CALL VERTICAL: 0.06

SOLD 5 SPX DEC15 2260/2270 IRON CONDOR - NET CREDIT OF $0.67 PER CONTRACT
DAYS TO EXPIRATION: 9
DELTA FOR CALL VERTICAL: 0.05

These are all staying well-behaved. I'll keep a close eye on these heading into the FOMC meeting next week - may take these off the table for a smaller profit and sit in cash until the trend is clear.

StockFetcher Forums · Stock Picks and Trading · KEVIN'S OPTION TRADING THREAD (READ-ONLY)<< 1 2 >>Post Follow-up

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