As my original Iron condor was not filled, I revised my Iron condor to shorter range. Though this is no my idea trade but I wanted to benefit from long weekend (due to theta decay). This was one of the most difficult fill for me for two reasons- 1) slow connection speed (I had extended my travel by one more week, and 2) very low implied volatility on call side. It was, I shall say, the most tough fill for RUT in my past nearly 8months. In any case here is what I was finally able to get filled:
- BUY: Call 870 and Put-750
- SELL: Call 860 and Put 760
- Credit: $2.05,
-
ROM: 25.7%
The risk to reward graph is not per my desire as its 860 is not even 1 standard deviation away but that was the farthest strike I could have gone for a good risk/reward trade.
Next week, I shall be back and should be opening other income trades. Stay tuned.Profitable trading, OptionPundit
If you want to be notified of posts, key alerts, free trade ideas, sign-up for Basic Membership (Extended till Feb 2010). To read OP’s live market commentary, live trading ideas and other OPNewsletter members-only features – Pls sign-up for OPNewsletter waitlist by clicking here
Related posts:
{ 3 comments… read them below or add one }
The premium is directly proportional to the IV. The May 860/870 Call Spread has an IV of 12.3 and the May 760/750 Put Spread has an IV of 23.5. So it is the premium on the Bear Call spread that is low.
I don’t trade futures. Will trading IWM options work?
odaz60zy, I also don’t trade futures (at least now) so I don’t really understand the concern here. IWM options will work? for which strategy? are you referring to this IC? If yes, it depends on the risk/reward you’re otaining and if that suits your trading strategy. Generally i have noticed premium may not be good enough on IWM when compared with RUT.
Profitable trading