Here is an update on the income trades that I had opened for May expiration cycle.
- Trade-1 RUT Iron Condor (750/760/860/870), Current profit = $52/$795, +6.54%
- Trade-2 Dow Double Diagonal (35/40/50/55), Current profit =$25/$485, +5.15%
- Trade-3 SPY Iron Condor (1:1 risk reward), Current loss =$54/$105, -51%
- Trade-3 OIH Double Calendar (150/155), Current profit =$50/$1035, +4.8%
There trades can be found here.
All the trades are still opened. April expiration is gone and now Theta will start its magic from the next week. Besides SPY Iron condor, no other trade requires any adjustments. On the surface it may seem as if it is a big loss, actually this trade was more of an speculative than income as I opened it with the speculation that SPY will drop after touching 148 and if you notice that breakeven points for this interesting iron condor were 140 and 147.9 with 1:1 risk reward ratio. That’s where portfolio management comes into play. If you consider 1 spread each on all 4 trades, that is overall $2420 investment but only $105 into SPY i.e. only 4.3% of total investment is in SPY.
Leaving aside portfolio allocation, It breached the upper breakeven point yesterday and hence requires an adjustment on Monday. I shall update once it is filled. With this adjustment, I shall have to give away some credit and therefore reduce my Reward/risk ratio. With this new adjustment, the upper breakeven point will increase to $149.5.
Profitable trading, OptionPundit