OPENING: SPY JUNE 16 222/226/240/241 IRON CONDOR
... for a 1.00 credit.
I'm doing this little fella as an adjustment trade to pick up a little long delta in a current SPY position. However, it could also be a fairly decent standalone trade if you're slightly bullish to neutral on SPY above 226.
The additional feature of the setup is the lack of call side risk on setup because the credit received equals the max loss that could be experienced if the call side is broken -- 1.00, the width of the call side spread. Put another way, max loss occurs only if the downside break even is broken; if the upside break even is broken at 241, you basically make nothing on the trade.*
Metrics:
Max Profit: $100/contract
Max Loss: $300/contract
Break Evens: 225/241
Theta: .50
Delta: 2.55
Notes: As a standalone trade, I would look to manage the setup at 50% max.
* -- Both of these scenarios contemplate you're doing absolutely nothing during the life of the setup, such as rolling the untested side toward current price.
I'm doing this little fella as an adjustment trade to pick up a little long delta in a current SPY position. However, it could also be a fairly decent standalone trade if you're slightly bullish to neutral on SPY above 226.
The additional feature of the setup is the lack of call side risk on setup because the credit received equals the max loss that could be experienced if the call side is broken -- 1.00, the width of the call side spread. Put another way, max loss occurs only if the downside break even is broken; if the upside break even is broken at 241, you basically make nothing on the trade.*
Metrics:
Max Profit: $100/contract
Max Loss: $300/contract
Break Evens: 225/241
Theta: .50
Delta: 2.55
Notes: As a standalone trade, I would look to manage the setup at 50% max.
* -- Both of these scenarios contemplate you're doing absolutely nothing during the life of the setup, such as rolling the untested side toward current price.
Comment:
Rolling the put side up to the 230/233 for a .23 credit, so I gain some long delta as well as "narrow" my downside risk ... . Scratch point now at 1.23, but I'll probably still shoot for 50% max or fold it up as part of my entire June SPY position.
