Opening (Margin): QQQ November 18th 240/260/314/334 Iron Condor
... for a 6.31 credit.
Comments: Moving out to November, which is still a bit long-dated ... . Selling the 23's on both sides for my short legs, erecting longs 20 strikes out from there. 6.31 on BPE of 13.74; 45.9% ROC at max; 23.0% at 50% max.
Here, I'm looking to manage just the short strangle aspect of the setup to delta balance if necessary, leaving the longs alone to safety tape off max loss as well as keep the buying power effect somewhat fixed. As I adjust the short options, however, the spread on one side or the other will widen, thereby increasing buying power effect, since that is attributable to the widest wing. For example, if I roll the short call down by one strike (1.00) and I get a .75 credit for doing that, the buying power effect will increase to 21.00 (since I've widened the wing to 21). However, I will have received a .75 credit for doing that, so my BPE will increase by 1.00 - the credit received or .25 ($25).
As with a naked short strangle, I'll look to adjust just the short strangle aspect of the setup at a delta/theta ratio of >1.00. It's currently .01/17.93.
Comments: Moving out to November, which is still a bit long-dated ... . Selling the 23's on both sides for my short legs, erecting longs 20 strikes out from there. 6.31 on BPE of 13.74; 45.9% ROC at max; 23.0% at 50% max.
Here, I'm looking to manage just the short strangle aspect of the setup to delta balance if necessary, leaving the longs alone to safety tape off max loss as well as keep the buying power effect somewhat fixed. As I adjust the short options, however, the spread on one side or the other will widen, thereby increasing buying power effect, since that is attributable to the widest wing. For example, if I roll the short call down by one strike (1.00) and I get a .75 credit for doing that, the buying power effect will increase to 21.00 (since I've widened the wing to 21). However, I will have received a .75 credit for doing that, so my BPE will increase by 1.00 - the credit received or .25 ($25).
As with a naked short strangle, I'll look to adjust just the short strangle aspect of the setup at a delta/theta ratio of >1.00. It's currently .01/17.93.
Trade active:
Rolled the 314 short call down to the 309 short call for a .73 credit to delta balance. Because this widens the call side spread by 5.00, it increases buying power effect by 5.00 minus .73 or 4.27. Total credits collected of 7.04. Since my original take profit was 50% of 6.31 or 3.16, I'm changing my order to close everything out to 3.16 plus .73 or 3.89.
Trade active:
Rolled the November 18th 240 long put down to the 235 for a realized gain and a .65 credit. Probably should've done this simultaneously with roll down of the call. Total credits collected of 7.69 with a revised take profit of 4.54. Since I've already widened the call side spread to 25, widening the put side to 25 doesn't cost any additional buying power (and, in fact, I reduce by power effect slightly because I collected .65 credit to do this).
Trade active:
Rolled the November 18th 309 short call/235 long put to the November 18th 304 short call/230 long put for a 1.37 credit. Buying power effect is increased by the 5.00 (how much the wings were widened), minus 1.37 or 3.63. Total credits collected of 7.69 plus the 1.37 here for 9.06. Revising take profit to 5.91.
Trade closed manually:
Closed for an 8.06 debit. 1.00 ($100) profit. Money, take, run.
