CME December Iron Condors

F

forex-forex

Has anyone tried some CME Iron Condors? I'm thinking of this one for December.

CME $513.00
Puts
490 Sell $6.60
480 Buy $4.80
Credit $1.80
Calls
530 Sell $9.30
540 Buy $6.80
Credit $2.50
Maximum loss $5.70
Maximum gain $4.30
 
It's your $5.70

Considering CME just covered the distance from 498 to 513 in one day, the odds of it sticking in this range for the next 30 days seems pretty low.

Keep in mind there's a dividend in about 3 weeks.
 
Quote from FullyArticulate:

It's your $5.70

Considering CME just covered the distance from 498 to 513 in one day, the odds of it sticking in this range for the next 30 days seems pretty low.

Keep in mind there's a dividend in about 3 weeks.
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Range would be 490 - 530 (to keep 100% of the credit), so I'm on the "bullish, neutral" side.

What happens to options in this case during the dividend? Aren't they adjusted accordingly?
 
After doing quick research on the CME dividend I have come to the conclusion that they won't have any affect on the stock or options. The dividend is only .5% or $2.52.

Thanks for pointing it out though.
 
Hi FF...I had some luck with CME earlier this year selling the combo (directionally) then flying it. I don't consider it a great IC candidate simply because it can and does move a lot. Its actually a better B-fly candidate...I think. If you have an opinion on direction buy the debt spread then if it moves in your direction sell the credit spread.
 
With the CPI coming out on Thursday, I would wait till then to enter positions; I usually leg in when CME had made a big move. ... but that is because I usually have directional bias.


Quote from forex-forex:

Range would be 490 - 530 (to keep 100% of the credit), so I'm on the "bullish, neutral" side.

What happens to options in this case during the dividend? Aren't they adjusted accordingly?
More...
 
Ok thanks for the replies. I like this one because of the 3:2 risk:reward ratio and the short options being 2 and 3 strikes out with more room on the bullish side.

I will check out the call debt spread.

Call
520 sell $13.30
510 buy $18.30
debt $5.00
Maximum loss $5.00
Maximum gain $5.00 if CME reaches 520+
 
Yes, this bull still has steam. CME is still bullish this week buoyed by the upcoming NYMEX IPO. IF you still want to enter an IC, I would enter the call spread no earlier than Friday, then enter the put spread next week on a pull back/profit taking.

Quote from daddy'sboy:

To leg or not to leg, that is the question :).
daddy's boy
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