UPDATE: May 22, 2017 TRADE CLOSED
Today morning, our puts closed for 0.05 debit. This closes our Iron Condor with 13.20% profit in 32 days and 150.56% annualized return.
UPDATE: May 1, 2017
On May 1st our short calls got closed for 0.05 debit.
We still hold our 18.00/15.50 put spread and long 27.50 call.
We will not be closing the call option as it is worthless anyway so we let it expire (unless the stock suddenly shoots up so much that the call will become worth something to sell it for a profit.
We still have a buy back order in place for our short put option.
I got the TECK idea from this forum, so I put the stock to my watch list and watched it for a while. I like the behavior of the stock and think it is a good trade-able stock. It is volatile enough to provide good premiums (and I bet sometimes headaches), but what I liked the most was low maintenance requirements (approx. $400 per contract) which is only about a half of what I typically trade. So, for example, to trade X I would need ~ $800 maintenance and make $40 premium with TECK I need ~$400 to get $40 premium. Worth the risk.
So I decided to open an Iron Condor in my ROTH IRA account (I may also open a regular strangle in my trading account too):
BTO 1 TECK May26 27.50 call
STO 1 TECK May26 25.00 call
STO 1 TECK May26 18.00 put
BTO 1 TECK May26 15.50 put
@ 0.35 credit limit day
The trade filled for 0.43 credit.
You may have heard me saying many times that I do not like (hate) verticals. That is still true, however, that doesn’t mean that I do not use them time to time. There are the following situations when I use them (because I have no other choice):
1) the stock is too expensive to trade naked options
2) to reduce margin requirements in a small account
3) in IRA accounts where it is not allowed to trade naked options
The trade executed and I placed a buy back orders on the short legs only (to buy back for 0.05 debit). If any of the side gets breached I will attempt to roll that side.
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