TRADE IDEA: QQQ AUG 18TH 127/130/145/147 IRON CONDOR
The Q's have the highest implied volatility rank among the four major index exchange traded funds. That being said, I generally look to bring in one-third the width of the widest wing with these with the short options set up at the 20 delta, and I'm not getting that here, so it's less than ideal ... . The metrics:
Probability of Profit: 62%
Max Profit: $69/contract
Max Loss/Buying Power Effect: $231/contract
Break Evens: 129.31/145.69
Theta: .82
Delta: -1.78
Notes: Look to manage at 50% max. For an undefined risk alternative, go with the 130/145 short strangle, which pays 1.86 at the mid and has a probability of profit of 68%, BE's at 128.14/146.86, theta of 3.84, and a delta of 1.89.
Probability of Profit: 62%
Max Profit: $69/contract
Max Loss/Buying Power Effect: $231/contract
Break Evens: 129.31/145.69
Theta: .82
Delta: -1.78
Notes: Look to manage at 50% max. For an undefined risk alternative, go with the 130/145 short strangle, which pays 1.86 at the mid and has a probability of profit of 68%, BE's at 128.14/146.86, theta of 3.84, and a delta of 1.89.