Closing the Feb7 $LULU iron condor

17Jan - closed this today with stock at 242ish for good win. target for exiting iron condors is around 21days left to opex and/or between 25%-50% of max profit. click the youtube video link below to see why. so today was 21days on the dot. im sure you could milk out some more decay by holding over the 3day weekend but trying to be mechanical on exits to get the high percentage of winners. since entry the stock went above 240. my put spread premium remaining at that time was only 5cents so I took profits on that and resold at higher strikes / higher delta. settled on the 215/225 credit put spread for .80 credit, 225 at 13 delta. I also doubled the lots. a 16delta is a one standard deviation move so in order to get little bit more premium I doubled the lots instead of going for a higher delta (higher strike price) in this case went to 2lots (keep the original 250/260 credit call spread untouched) so a credit of 1.60

200/210 credit put spread - .97 profit
215/225 credit put spread - 1.60credit received
250/260 credit call spread - 1.48 credit received
"adjusted" iron condor total credit $3.08 which closed today at 2.33. total profits after adding it all up was $1.72 for a 42% of max profit win. made all the profits on the put side, the call side was a scratch. worked out as expected though. closed right at 21 days and within the 25-50% target. starts to add up when you increase in lot size. im gaining experience and confidence on rolls and adjustments and that will transition into little bit higher lot sizes as the bank account increases. no bullshit.. review that video link for the research and reasoning behind taking profits like this vs riding to expiration. its a gamechanger. hope you followed and make some walking around money too. on to the next one.

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27dec

entered into iron condors on LULU on Friday with stock at 230ish. had a couple cash secured put sale trades right after earnings a few days back and have a diagonal spread going currently so I have a bullish outlook on this name. im on the lookout for a selloff day so premium pops in order to do another put sale.

using some of the guidelines from the Tastytrade videos ive seen recently

Sold the Feb 7 200/210 put spread and the 250/260 call spreads to make an iron condor for $2.50 credit.

Ideal entry points are near 45 days to opex and high IV rank/percentile and strike selection near 1standard deviation move which is near 16delta.

Feb7 strikes give me 42 days, the 210 put strike was at 14delta, 250 call strike at 23 delta. I feel there is more downside risk so went a little further down in delta on the puts and wanted to be comfortably below the 50day moving average and the low from the brief earnings selloff. the upper strike would be in nicely into 52week high territory. nothing special about the IV unfortunately.

Per the Tastytrade videos, statistically its a higher win percentage by going to a wider striker selection (the 10dollar wide puts and calls) vs doing the 5dollar wide for more lots so I went with the 10dollar wide. Ideal credit received is 1/3rd the width of strike but would have to be higher in delta for that so shooting for at least 25% of width on the 10dollar wide.

targets for exiting is 25-50% of max profit and/or near 21 days left to opex.

Tastytrade youtube video on managing winners

CLOSING The $ROKU iron condor 31Jan opex

7 Jan - this week took profits according to plan. either in the 25-50% of max profit range or near 21days left till opex.

closed this for $1.00 for a 41% of max profit winner, 22day hold. per the Tastytrade videos/research, 21 days to opex and/or at 50% of max profit is the optimum point to take profits. after that the risk return changes against you. see some previous posts with links to youtube videos of their work.

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this week also entered another iron condor on ROKU as the first one is working.

Sold the Jan31 105/110 put spread (14delta)
Sold the Jan31 160/165 call spread (27delta)
for $1.70 credit
IV was 60+
46days to opex at time of entry

profit targets again are 25-50% of the basis ($1.70) and or close with 21days left to opex



purple on the chart are the short call levels

todays no trade on $FDX

didn't enter a trade today on Fedex and heres why. was watching the reaction to the earnings after hours yesterday and was hoping for a continued down move enough so i could possibly sell cash secured puts 30-45 days out below the low near 137ish. big selloffs are usually high probability trades since the volatility spikes temporarily (meaning the option price) and the natural price increase for the puts since its a down move. what i hope to see on stocks with this type of move is where you see the earnings results / conference call comments that appear to be positive.. weve all seen them where a company is growing 40+ % or whatever and some metric is slightly off or just misses the consensus number and it sells off. the fast money desk maybe talks it up that the earnings were good or going forward looks great. essentially the stock sells off on good news. LULU comes to mind from a few days ago.

i dont follow Fedex carefully outside of the passing references on cnbc but what seemed to be going on with Fedex was going down on bad news. earnings misses, outlook poor or unconvincing, and not positive commentary on fast money. had the selloff but was lacking the positive portion needed to enter into a put sale. although a put sale might work out with time decay, im looking for the volatility crush (price decreases as volatility drops) AND some upside movement. lastly remember my rule that if the trade doesnt feel right (gut check) , i pass. my gut overrides and technicals or targets. another rule i have is only sell cash secured puts on stocks im ok owning and given the current sentiment i would not want to own Fedex.

save the buying power for another trade elsewhere

18 Jan update to Boeing $BA position

18 Jan - so best case would be stock is near 340 at time of opex so I could resell a higher strike short call for juicy premium for earnings week, instead with a week to go the stock was near 330ish and the short call (jan24 340) was at a 78% of max profit winner of $3.47 and only 93cents remaining. just missed out on the 4-5dollar down move at end of day but near 330 I closed the short call and instead bought a 1x2 call ratio spread, buy the Jan24 330 call and sell 2 of the Jan335 calls . that trade for zero. the "2nd" short 335 call is not naked since I have the Jan2022 call still. so its just like having 2 calls spreads. thesis is that for zero cost I have a profit range of 330-340 at opex with max profit of $5 at 335 pin. close out this ratio on jan24 and sell another short call or ration prior to earnings on 29jan depending where stock is at.

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2 Jan - stock was up +3 on the day back to 330 ish. resold another short call to get the diagonal spread back Sold the Jan24 340call at $4.40. delta 35 . stock at 332 on 3Jan

went with Jan24 opex since its the last weekly prior to earnings on 29jan. selling a opex after earnings youre not getting the decay since the IV is increasing for the earnings. target is 75% of max profit before closing and reselling a weekly for the earnings IV spike.

30 dec - closed the short call today at $1.72 which is a 60% of max profit win. resell another call on an up day. lowered the cost basis of the DITM call for $3+



27 dec - update to my Boeing diagonal spread. since entry 10days ago the CEO has been fired, some more emails surfaced and the stock is up a few bucks to 330ish. my short call is doing its thing and has depreciated 35% and going for $2.80 now. reevaluate after another week as to where to roll the short call with earnings at end of Jan

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17 dec - have to say im about having Phil Lebeau overload but I guess its his beat. Maybe Phil showing up in person on Fast Money marks a bottom in Boeing. my thoughts on the stock. been getting considerable coverage on CNBC with nearly all of it being negative. despite that the stock has been range bound. had the "rumor" yesterday during market hours that they would halt production of the 737 Max and had the down move. the official news came out after hours and I was watching for a flush down 5-10% in order to price out some cash secured put sales.. seems that the big move happened with the rumor during market hours and stock closed in the green today

you've heard the saying about when a stock stops going down on bad news that it might be an indicator of something. was pricing out a 300 short put about 30days out for $3.00+ but instead went with my go-to trade of buying an in the money call (LEAP) and selling a near term upside call making a diagonal spread. also called a poor mans covered call

additionally as mentioned on the Fast Money desk and in the twitterverse that everyone was looking at the 320ish level to hold which seemed to have happened for today at least.  margin requirements will differ but in my head I always figure I need to have the full amount of cash available if I am put the stock so instead of committing $30000 for the put sale I went with the diagonal spread for about 25% of the capital requirement. I have an iron condor on in the regular Jan exp options so I went to earlier opex to sell the short call just to keep the strikes and expirations easier to manage

Bought the Jan2022 300 call
Sold the Jan 10, 2020 340 call at $4.30 (32delta)

goal is to sell upside calls bringing in premium while the company and the FAA do their thing to get the planes in the air. would assume that down the road once the grounding is lifted the stock takes off on the news. I expect the stock to move around a bit based on the latest news but have plenty of time since the long call is 2022.

$LULU short put trade today -2nd one

13Dec - another small win on this one. stock was down 3-4 in the morning so went out farther to gain some premium since the IV from yesterdays earnings selloff had already fallen, still targeting 25ish or lower delta. stock started to comeback after lunch so went ahead and entered a limit order to close in case I was away from computer. filled for a gain, 31% of max profit.

Sold the Jan20 210put at $3.60, IV was 30ish, delta 26
Bought back at $2.50 for $1.10 gain

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12 Dec - stock dropped $10+ from earnings yesterday. was around 219-222 when I was looking at it this morning. the call fly from below will go out worthless but only risked .35, the earnings seemed decent so on the big down move the put premiums get juiced so I went out a few weeks in order to get decent premium and a couple weeks in time if needed. my eye goes to the 20delta area for starters always. definitely wanted to have the strike below the 50 day.

Sold the Jan10 202.50 put at $2.05 . delta as time of sale was 16, stock at 220ish

stock was sideways and up a couple bucks near the end of day so the IV comes down a bit as well. was showing a 50% of max profit gain so closed the trade.

Bought back the put at $1.00

again my new profit targets are 25-50% of max profit vs holding to try to get 75% + or to opex and tying up the buying power. can do more of the "small" wins in the same time frame as holding to opex. not a large dollar winner. usually do between 1-5 lots depending on the buying power so the small wins can start to add up.(and the winning put sale makes up for the loss on the call fly).  if continued down move will look to resell a put.

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screwed this up already, posted on twitter yesterday:
going to price out a call butterfly on $LULU on wednesday prior to earnings. at 230ish now the expected upside move is 19ish so 250 like mike says, im thinking the 245/250/255 call fly using weeklies. i want to risk even less than mikes $1.85


I was setting up the trade for shits and grins today so I could have ready for tomorrow and just watch the pricing as it moved around today. was going to submit it on Wednesday afternoon based on current pricing and expected move. regardless I hit submit instead of save so I own it. with stock near 229-230 the weekly options were pricing in a $20ish move for earnings. Mike had a calendar spread trade on Options Action which got me looking. $1.85 was too steep for me so with the assumption that the powers that be gets the expected move correctly and a bullish bias gets the stock to 250ish. entered a call butterfly 245/250/255 on this weeks options.

buy 1 of the 245 calls
sell 2 of the 250 calls
buy 1 of the 255 calls
limit order of .35 filled instantly and was 2cents under the midpoint

Just a one lot to amuse myself. Implied volatility is high so if earnings seem good but stock sells off hard I will look at a short put sale. so I might have a win in either direction and .35 not a big loss if wrong. will not  hold to expiration since that rarely works out well, just a pop to 250 area should have a decent percentage gain. cant say I follow the stock, the high IV gets it onto my watch list for the moment

square box is rough profit area, a selloff to near the 50day at 210ish gets me looking at a cash secured put sale. best case short strike 185 or lower but 190 or lower is a level to look at also. lets see what happens with earnings and the resulting commentary

EXITING the Boeing $BA iron condor

27 dec update- something im finding compelling from the Tastytrade videos ive been going on about is the adherence to the mechanicals of trading. following the probabilities, the statistics, entry and exit targets, profit targets. really reduces the emotional highs and lows. one of their takeaways is to close iron condors / short strangles between 25-50% of max profit and/or near 21 days till opex. one of the videos ive linked before shows how the option decay rate and the percentage of profits change near the 21day mark. so in order to be disciplined and follow their bullet points I exited this revised iron condor yesterday at the 21day mark. although im confident that my strikes would have made this more profitable the risk return has now changed. read from the bottom and you will see that I rolled down the call spread portion for a profit during the 17days I held this. felt like longer. my cost basis of the "adjusted" condor was $2.19 and exited at $2.15 for essentially a scratch with the chump change commissions added in. the profits on the credit spread came to be .67

im going to figure my profit as such --- total credit received of $2.90 (see 21dec update) with .67 profit give me a 23% of max profit winner

this methodology is new compared to how I used to trade so granted this trade is not a big dollar winner for a one lot but until ive had multiple trades on with my own money, including outright wins, making adjustments, etc im keeping my lot sizes between 1-5 depending on the underlying. validating the concept first. point being is to focus on making multiple 25-50% wins and the profits build and then you can make Najarian size trades. more importantly preserving that mental capital with many winners keeps you in the game.

on to the next one.


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21dec update- 27days till opex now, this week made an adjustment to the call spread portion of this iron condor since the stock moved towards the puts

Closed the 380/390 call spread at .23 (for .71profit)
Sold the 355/365 call spread for $1.28 credit at time of sale

Initially received .91 for the put spread plus the $1.28 from the "new" call spread give me $2.19 cost basis. again going to just ignore the profit from the 380/390 call spread since im essentially establishing a new iron condor at 305/315/355/365. but you can also argue that I received $2.90 ($2.19 + the .71 profit). the stock has moved down a bit since the new call spread sale so that portion is up 40% but has plenty of premium remaining so another adjustment is not needed yet. give this another 10 days or so. would like to exit the "new" condor in the green. earnings are week after opex so cant enter new condor yet. will be continued tape bombs till then

purple are the new iron condor short strikes

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Boeing seems to be mentioned daily on CNBC / Fast Money and all the news is bad news seems like and as mentioned on air the stock still has not sold off meaningfully. using that as a basis going to enter my first trade ever in Boeing with an iron condor, stock has been relatively range bound last 6months. nothing special with the IV so just expecting some time decay with target of 25-50% of max profit

Sold the Jan 305/315 credit put spread. 315 delta at 12
Sold the Jan 380/390 credit call spread. 380 delta at 15
total credit received was $1.83
38 days to opex

as ive seen in some of the Tastytrade videos on youtube its more effective to chose wider strikes (the 10 dollar wide in this case) vs 5dollar wide with bigger lot size. wanted to be no higher than 15 delta which is near 2 standard deviation move. the levels on the chart work well also with the 380 level near some near term resistence and the 315 level under some near term support. again the target profit is 25-50% of max profit, not hold till expiration.

Closing the $ROKU adjusted credit put spread

6jan - ROKU up 5+ to 143ish today so took the opportunity to exit the remaining portion of the iron condor that was adjusted. that being the Feb115/120 credit put spread. wanted to exit this "position" in the green and not have the spread open since it included next months earnings.

closed the feb115/120 credit put spread at 1.35 this a.m. on the up move. was last portion of the adjusted iron condor. with this last trade was able to exit the "position" in the green. $ROKU

was a green trade of .55 so no complaints. continue to gain experience/confidence with the adjustments / exits of iron condors so im happy with the outcome. green is green

31 dec  - with 17days till opex went ahead and did a partial exit / partial roll. the optimum exit for iron condor is near 21 days per the Tastytrade studies. the "adjusted" 120/125/155/160 iron condor was 40cents in the red and I thought I saw a premarket trade in the 128 range but stock was 130-133 range when I got to the computer in the morning. point of exiting near 21 days is that now you have a higher likelihood of stock moving against you so better to exit and redeploy the capital on the next trade. instead of closing for a loss I rolled out the put spread portion to the next expiration where I could move down in strikes for a credit. that being the 115/120 strikes now for Feb opex. credit was .23 I believe off memory. this opex catches next earnings but wanted those lower strikes and always want to make adjustments for a credit. 29 delta for the 120strike

the call spread portion I closed out for a profit of .30 plus had the profit from the 180/185 calls of .40.

quick back of the envelope math (actually did use an envelope) need about .90 of decay off the Feb115/120 to put the entire position into the green. Im still working thru the mechanics of optimum entries and exits and position adjustment / defense but im happy with this outcome... adjust the puts that are being threatened, gained another month for a credit, lowered the strikes for a credit and within striking distance of being in the green. because the Feb opex catches earnings im holding off for the moment on adding the credit call spread to reset the iron condor. no hurry since im also working another iron condor and a short put/credit spread as well. was just near 140 2 days ago so a return to there will either exit the puts or add the credit calls for the iron condor.. but lean to exit altogether since Id rather not have this on thru earnings. If im going to enter a position to include earnings I will do so a day or two prior to base it on the stock price at the time.

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28 dec- another week gone by and the stock is at 139ish, smack in the middle of the "adjusted" iron condor 120/125/155/160, price is near breakeven for the total position with the previous call spread adjustment profit thrown in and the stock is down 8 bucks since entry. going to give this trade another week and see where we are on Friday, want to exit this with a green board soon. IV is staying high so not getting any volatility crush




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21 dec update- been couple weeks since entry, stock was at 147 at entry and closed at 136ish yesterday. since it moved in the direction of the put strikes the value of the put spread is up (mark to market loss) and the call spread is a gain. the call spread short call had a delta of 7ish so little premium remaining. adjustment made was to close the call spread and resell another call spread with strikers lower, looking for the same short delta area that I had with the previous strikes, that being low 20's. went with the 155/160 credit call spread

closed the 180/185 call spread .30 debit
sold the 155/160 call spread .75 credit

so I received .40 credit by making the adjustment with makes the iron condor 120/125 155/160. initially received .93 credit for the puts plus the .75 for the new 155/160 calls get me back to 1.67 credit as my basis. I just book the gain from the 180/185 call spread and don't figure it into the math, easier for me to track. the "new" iron condor is technically underwater since the stock is closer to the put spread since entering the trade 2weeks ago. profit target remains 25-50% of the basis ($1.67). IV remains high and is not getting much of a crush. the other target noted repeatedly by the Tastytrade videos is exit the trade at 21days remaining. I will do so as well if I show a profit on day 21, may have another adjustment prior to but see where stock in then. im trying to stay with the discipline of being more mechanical on exits and entries.

chart shows the new call spread short call moved down from 180 to 155. purple is a further out iron condor I will blog separately

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have to say I'm impressed with the educational content of the www.tastytrade.com site. has made me a better options trader and I've only been watching their videos a couple months. the readers digest version of their strategy is :

- sell premium with the IV is high, they have a IV rank metric on their platform that they use and want the IV rank to be over 50% which I believe means the IV of the stock is 50% higher than usual (and will revert to a mean). the Etrademonster platform has an IV rank also but doesn't seem to match up to theirs so I refer to the IV of the specific option strike I'm selecting.

- sell premium at / close to 45 days and take profits at either 21days till opex or the 25-50% of max profit level. seems to go against traditional thinking but after seeing their videos the point of this is that you get the best volatility crush in the first couple weeks (from 45days till 21), after that the gain is more on time decay. holding closer to 21 days has more risk of market movement with minimal remaining premium.. in other words take the meat of the volatility crush and some time decay as your profit and then move on to the next trade vs milking it for the last penny.

- target strikes for selling at 1-2 standard deviations out of the money which is about 15-20 delta. these strikes gives you 85%+ winning trades.

- when selling credit spreads / iron condors the goal is to take in about 1/3 the width of strikes as premium( $5 wide strikes, goal to take in $1.67).. the high IV juices the premiums so you are likely to get this amount

takeaway, take profits sooner (manage the winners) and sell only high volatility

having said all that, I'm trying to catch a couple of their streaming shows during the morning hours since the crew actually puts on trades vs the CNBC repetitive commentary. a viewer suggested an iron condor on ROKU this morning. I don't follow closely, had a few Disney trades a few weeks back so just using the methodology of the videos:

Sold the Jan 120/125 credit put spread (delta of the 125 short put is 18, IV 60+)
Sold the Jan 180/185 credit call spread (delta of the short 180 call is 21, IV 60+)

makes the position an iron condor for $1.66 credit (take in $1.66, max risk $3.34 at opex without adjustments)

breaking this down:
-sell high IV... yes , was 60+
-sell close to 45 days, yes.. 42days to opex
-sell 15-20 delta... yes
-collect 1/3 size of strikes..yes, collected $1.66 for one lot
-target taking profits at 25-50% of max profit

here is a youtube video on taking profits on iron condors as a reference Tasty Trade video