Bread & Butter Iron Condors

This is me....
My history had been several ICs in a combination of RUT and NDX.... A hit to the market will impact all.... but at least I do not execute ICs on individual stocks.....

I can say that after next week, I only have 15% in the market all in NDX ICs which expire in Sept.

After reading this and a couple other relevant threads, I will start reducing my exposure.
 
Quote from rocky_raccoon:

If you have 10 groups of ICs, are they correlated (e.g. RUT, SPX, NDX) or non-correlated (e.g. SPX, GLD)?
In other words, if a large movement happens will it negatively affect all your positions or only some?
More...


I'm only opening SPY Iron Condors these days, so there's no correlation involved.
But I see your point about it adding to the "Total Risk" if there was!

There's a SPY group expiring in every month from August-January.
About 1/2 of them are completed (Top & Bottom Legs) and 1/2 with just 1 leg opened so far.

The completed ones have various ranges, and the August 17th closers with Tops in the low 140s are worrying me at the moment.
Could use a pullback in SPY before next Friday!
:)
 

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Here's some stats to show the influence of Time & Commissions on the Percentage Gains and Risk/Reward Ratios for SPY 150/151/130/129 Iron Condors, with SPY@140.00:

September:
Mark Credit: .13 (.06 comm) = net .07
% Gain: 8.05%
Risk/Reward Ratio: 12.43/1

October:
Mark Credit: .24 (.06 comm) = net .18
% Gain: 23.68%
Risk/Reward Ratio: 4.22/1

November:
Mark Credit: .35 (.06 comm) = net .29
% Gain: 44.62%
Risk/Reward Ratio: 2.24/1

I know the conventional wisdom says more time = more danger, which is why the Credit you receive is larger as you go out in time.

But we're in a choppy to mildly uptrending market, so who knows where the SPY will be in 1, 2, or 3 months?
What SPY does during the final month (week?) is what counts.

So I prefer the lower Risk/Reward Ratio going 3 months out.
It's enough profit to make it worth the risk, and you have plenty of time to get out for less than a Max Loss if things go really wrong.

I still don't feel comfortable risking $87.00 to make $7.00.
Too much risk for too small a reward!
:)
 

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Quote from cactiman:


September:
Mark Credit: .13 (.06 comm) = net .07
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How do you calculate commission of .06? This is $6/contract, correct? If you pay such commission, run away from that broker. Others charge a lot less.
 
Quote from rocky_raccoon:

How do you calculate commission of .06? This is $6/contract, correct? If you pay such commission, run away from that broker. Others charge a lot less.
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Quite right, though I remember back in the late 80's paying a few hundred dollars in commissions to buy 100 shares of stock!!
Times sure have changed.

No, that's $1.50 per Option Contract at thinkorswim.
Each leg = 2 Options = $3.00 x 2 legs = $6.00 per IC.

Very important to factor in the commissions with multiple contract trades like Iron Condors.
When you only make $13.00 gross profit for a September IC, $6.00 in commissions is 46.15%!
 
Quote from cactiman:


No, that's $1.50 per Option Contract at thinkorswim.
Each leg = 2 Options = $3.00 x 2 legs = $6.00 per IC.

Very important to factor ---
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If you trade SPY, then 10 spreads is probably your minimum to make any meaningful return in absolute terms.

These are the brokers and their commissions for 10 spreads:
TOS: $60
IB: $28
TradeMONSTER: $20
OptionsHouse: $18.5
eOption: $16

You're paying way to much.
 
Quote from rocky_raccoon:

If you trade SPY, then 10 spreads is probably your minimum to make any meaningful return in absolute terms.

These are the brokers and their commissions for 10 spreads:
TOS: $60
IB: $28
TradeMONSTER: $20
OptionsHouse: $18.5
eOption: $16

You're paying way to much.
More...

Whoa! I thought t.o.s. was the best deal in town, and it's the worst!
Thanks for the info.
:eek:
 
Quote from rocky_raccoon:

If you trade SPY, then 10 spreads is probably your minimum to make any meaningful return in absolute terms.

These are the brokers and their commissions for 10 spreads:
TOS: $60
IB: $28
TradeMONSTER: $20
OptionsHouse: $18.5
eOption: $16

You're paying way to much.
More...


Looks like there may be a catch at tradeMONSTER:

Options $0.50 Per Contract*

* The commission is calculated by counting the total number of contracts across all legs. The charge is $0.50 per contract, with a minimum commission of $12.50 for single leg orders and $15.00 per spread for multi-leg orders.

:confused:

Does this mean the first IC costs $15.00?
Or does it mean the first 7.5 ICs cost $15.00, then they're $2.00 each after that?
 
For 10 ICs (40 contracts) total tradeMONSTER commissions are 40*.50 = $20. $15 is a minimum for spreads.
If you sell 1-7 ICs, your commissions will be $15; for 8 ICs it will be $16, and so on.
 
Quote from cactiman:

Quite right, though I remember back in the late 80's paying a few hundred dollars in commissions to buy 100 shares of stock!!
Times sure have changed.

No, that's $1.50 per Option Contract at thinkorswim.
Each leg = 2 Options = $3.00 x 2 legs = $6.00 per IC.

Very important to factor in the commissions with multiple contract trades like Iron Condors.
When you only make $13.00 gross profit for a September IC, $6.00 in commissions is 46.15%!
More...

I'm really enjoying this thread.

I have a question on TOS commissions, specifically Options on Futures.

On this page ( https://www.thinkorswim.com/tos/displayPage.tos?webpage=servicesOrderTypes&displayFormat=hide# click on Futures tab, fine print below table) it says $3.00 per contract inclusive of exchange fees, whilst on this page ( https://www.thinkorswim.com/tos/myAccounts/displayRates.tos# click on options tab) it says $9.99 + 0.75 per contract for Equity or Index Options.

None of these rates are close to what you mention, and indeed I was put off from checking further by the high rates.

For a simple buying of a call or put, what should we expect the commission to be? Is it tied to a volume scale?
 
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