OPENING: SPY SEPT 1ST 238/241/249/251 IRON CONDOR
... for a .95 credit.
I really wanted to go with the highest implied volatility broad index exchange-traded fund (SPY, IWM, QQQ, DIA), 45 days until expiration, but the bid/asks were wide on both IWM and QQQ in the Sept 1st expiry, so went with SPY instead, which had a much tighter bid/ask. The short options here are set up around the 30 delta, so I'm somewhat surprised at the low probability of profit metric, which ordinarily would be around 50% ... . Will look to take profit at 50% max.
Metrics:
Probability of Profit: 43%
Max Profit: $95/contract
Max Loss: $205/contract
Break Evens: 240.05/249.95
Delta: -2.57
Theta: .88
I really wanted to go with the highest implied volatility broad index exchange-traded fund (SPY, IWM, QQQ, DIA), 45 days until expiration, but the bid/asks were wide on both IWM and QQQ in the Sept 1st expiry, so went with SPY instead, which had a much tighter bid/ask. The short options here are set up around the 30 delta, so I'm somewhat surprised at the low probability of profit metric, which ordinarily would be around 50% ... . Will look to take profit at 50% max.
Metrics:
Probability of Profit: 43%
Max Profit: $95/contract
Max Loss: $205/contract
Break Evens: 240.05/249.95
Delta: -2.57
Theta: .88
Trade closed manually:
Covering here for a .98 db (.03/$3 loss). Rotating into low vol setups.