2017-01 Iron Condor results
Iron condor is one of my favorite bread-and-butter trade every month. This strategy falls into my categorization of conservative speculation.
Traditionally, iron condor consists of two credit spread: one put credit spread, and one call credit spread. Iron condor has a limited risk, and has a limited profit. If you do not know what iron condor is, check out the following video by Sky View Trading.
It may be apparent that if you want to make a large profit from iron condor, you will have a high risk of losing. If you want a high win rate for iron condor, then you can’t expect that much.
To increase the profit range, I normally add a debit spread within my iron condor position. If Mr. Market cooperates, you will get a higher profit, and the risk is limited.
Here is my transaction for SPY Iron Condor for 2017 January stored in OptionVue.
This trading brought me 143 dollars before commissions. Here are quick trading notes.
2016/11/28: Initiated the iron condor: 215/210 put credit spread, 226/231 call credit spread, with Feb expiration, two contracts each. The risk was 1000 (2*5*100), and the credit received was 348.
2016/12/7: With the market continued to rally and I did not expect a correction in the near future, I bought 3 contracts of 224/225 call debit spread, which cost 180 dollars.
2016/12/13: The rally really messed up my set up. I had to close the whole position and restarted a new one. Closing the old position cost 550 dollars, which means that I loss 202 dollars.
After I closed the position, I rolled it up, with 221/216 put credit spread, 232/237 call credit spread, and received 318 dollars.
2017/1/10: My position was close to expiration, and I could not anticipate the market before inauguration. I decided to close the position. The iron condor part cost 36 dollars to close, and the debit spread part was sold for 243 dollars. My final profit was 143 dollars before commissions.
Here is what it looked like when I closed the position.
Trading is not an easy job to do. In this case, if I did not adjust my position and add debit spreads, I would end up losing a significant amount of money. If I did not add debit spread but did the adjustment, then I would have a profit of 80 before commissions. It’s not bad for a 1000-dollar investment, and if I can do that consistently every month, I would be very happy.
Iron condor is a flexible trading strategy, but it definitely requires adjustments. If you want to learn more about iron condor, here are two books that can give you a good start.
I will do a more-detailed review when I have a chance.