COST – 10/8/18 – Iron Condor

COST – 10/8/18 – Iron Condor

I liked the price action on COST and was able to get a pretty good premium (or at least I initially though so) with Implied Volatility at 34.04 so I decided to go with an Iron Condor.

On 10/8 with COST trading at 223.27 I sold the 11/16 $240 Call and purchased the $250 Call. I also sold the $210 Put and purchased the $200 Put.

Remember above when I said I ‘thought’ I got a pretty good premium. Well, I forgot to take into account that the spread was $10.00 wide on this one. In actuality this was not a great trade for the risk.

My break even was $208.55 and $241.44 and I had a 68.68% chance of success.

On 11/12 after 39 days my GTC was hit and the trade closed for a $65.00 profit. This was a return of 7.56% because my risk was $860.00, this is what I meant by not really as good of a trade as I thought.

Date EXP Strike Price Ct C/P Cost Balance
10/08/18 SO 11/16/18 $240.00 $0.77 1 C $77.00 $77.00
10/08/18 BO 11/16/18 $250.00 $0.25 1 C -$25.00 $52.00
10/08/18 SO 11/16/18 $210.00 $1.61 1 P $161.00 $213.00
10/08/18 BO 11/16/18 $200.00 $0.69 1 P -$73.00 $140.00
11/12/18 BC 11/16/18 $240.00 $0.68 1 C -$68.00 $72.00
11/12/18 SC 11/16/18 $250.00 $0.04 1 C $4.00 $76.00
11/12/18 BC 11/16/18 $210.00 $0.11 1 P -$11.00 $65.00
11/12/18 SC 11/16/18 $200.00 $0.04 1 P $0.00 $65.00
Profit of: $65.00

 

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