Exit this condor with 9 DTE?
- Thread starter Altavest_Erik
- Start date
Something is off here -- maybe it's your use of the word, "capture" that's throwing me --
but with any such decision, reward/risk is the worthwhile start.
Right now, the picture looks a lot like this:
...and so, the top is ~12¢ (using MIDs), while the bottom is fairly 5¢, since it's another 100 pts below the nickel-wide spreads at 2700. So, ~17¢ -- 20¢ if you want to be reasonable.
So, would you enter a $20-wide IC, to get <20¢ over 9 days?
By way of answer, consider this:
...being six ES expirations, with vertical spreads representing premium-net-of-commissions for $5-wide, $10, $15, and $20-wide, in those four columns. This is from ~24 hours ago, so we'd need to drop the IC down from 2990/3010 to 2970/2990 [cell Q73] for equivalent study. (You can see how the market has 'inflated' the topside expectation from 07¢ yesterday to the current ~12¢...)
But, rather than hold that well-bled dog to expiry for 9 days' loss of capital mobility for a total of 20¢, why not go two weeks out (Oct19) doing $20-wides at 2970 (cell AC73) and whatever down below (since the table doesn't go that low...!), and hold that "one-sided [rusty]Iron Condor for a mere 7 days, and buy it back for (cell W73) 37¢ a week from now?
To restate, then: "would you enter a $20-wide IC, to get <20¢ over 9 days?
My preference would be instead go (at least) two weeks further out to Oct 19, and put on the same trade for (at least) 40¢ for a shorter 7-day hold. You've tripled the return, gotten no closer to the market, left one side open (in puts) in case of "emergency...", and certainly bettered the use of your $20 of margin capital. "Yay, team!"
but with any such decision, reward/risk is the worthwhile start.
Right now, the picture looks a lot like this:
...and so, the top is ~12¢ (using MIDs), while the bottom is fairly 5¢, since it's another 100 pts below the nickel-wide spreads at 2700. So, ~17¢ -- 20¢ if you want to be reasonable.
So, would you enter a $20-wide IC, to get <20¢ over 9 days?
By way of answer, consider this:
...being six ES expirations, with vertical spreads representing premium-net-of-commissions for $5-wide, $10, $15, and $20-wide, in those four columns. This is from ~24 hours ago, so we'd need to drop the IC down from 2990/3010 to 2970/2990 [cell Q73] for equivalent study. (You can see how the market has 'inflated' the topside expectation from 07¢ yesterday to the current ~12¢...)
But, rather than hold that well-bled dog to expiry for 9 days' loss of capital mobility for a total of 20¢, why not go two weeks out (Oct19) doing $20-wides at 2970 (cell AC73) and whatever down below (since the table doesn't go that low...!), and hold that "one-sided [rusty]Iron Condor for a mere 7 days, and buy it back for (cell W73) 37¢ a week from now?
To restate, then: "would you enter a $20-wide IC, to get <20¢ over 9 days?
My preference would be instead go (at least) two weeks further out to Oct 19, and put on the same trade for (at least) 40¢ for a shorter 7-day hold. You've tripled the return, gotten no closer to the market, left one side open (in puts) in case of "emergency...", and certainly bettered the use of your $20 of margin capital. "Yay, team!"
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My guess:
The question was meant to start a debate. Getting people on both sides. There will be arguments flung about; frustration, but eventually no consensus.
Then when the dust settles, a hero steps forward and says "easy, when the green box under 'RTI' turns blue" (or some other indicator that the "Secret Weapon" would produce).
And the hero coolly walks away while the others stare in awe.
And then further, it would be shown that the Secret Weapon already took into account all the data on those spreadsheets when it was put on. And how easily customize-able it is, etc.
"With the Secret Weapon... you can calmly capture any Condor"
((Note: Yeah, this is how I would do the commercial for said product.))
The question was meant to start a debate. Getting people on both sides. There will be arguments flung about; frustration, but eventually no consensus.
Then when the dust settles, a hero steps forward and says "easy, when the green box under 'RTI' turns blue" (or some other indicator that the "Secret Weapon" would produce).
And the hero coolly walks away while the others stare in awe.
And then further, it would be shown that the Secret Weapon already took into account all the data on those spreadsheets when it was put on. And how easily customize-able it is, etc.
"With the Secret Weapon... you can calmly capture any Condor"
((Note: Yeah, this is how I would do the commercial for said product.))
Hi Tom, Indeed...indeed...as we like to say, "The juice isn't worth the squeeze." As you pointed out, the potential reward remaining in the IC example isn't likely worth the risk and/or opportunity cost of holding any longer.
I
I appreciate the exercise, and the excuse to detail a method. (Unlike ol' Gutless there...)
I appreciate the exercise, and the excuse to detail a method. (Unlike ol' Gutless there...)