Adjusting RUT Iron Condor - April 5th

Today we are adjusting the position as follows:

Trade: Buy Back RUT April 870/875 Call Spread - Roll (Re-Sell) to RUT April 880/885 Call Spread

Premium: Closing Trade = $90 (0.90) Premium. Rolling Trade = $50 (0.50) Premium.

Underlying Price: $852

Max Return: -1.02%

Break-Even Prices: $880.50

Time Until Expiration: 9 Days

Probability of Loss: 9.68%

Trade Explanation: As we discussed in the trading video yesterday for members I have decided to roll this upper Call Spread of this RUT Iron Condor higher. While I still do believe that the market will continue sideways and the risk of dropping lower is significant, we must reduce the risk exposure on this trade before the market gets too out of control.

As it stands now with this adjustment, our overall profit/loss on the trade will now be 1.02% (or a $10 loss after adjustments per Iron Condor). If the RUT closes below this 880 level then I will be very happy to have such a small loss as opposed to a much bigger loss. Remember that with Iron Condors you are naturally taking on more risk and we need the markets to trade fairly flat. Since the RUT has gone directly higher we do have this added risk that hurts the positions.

As always, please let me know if you have any questions or comments.

  • Kirk - Admin

    After the market moving higher about 15 mins following our alert...things have come back down near the end of the day. With today's high volume this should be an easy position to roll higher.

    Later this week we might also roll the Put side of the trade (which is 100% profitable right now) higher as well and take advantage of some more premiums to push this trade back into the green.

    As always, let me know if you have questions!