EEM – 10/12/18 – Iron Condor

EEM – 10/12/18 – Iron Condor

This was a hedge trade I had on a Diagonal that was losing money. I wanted to try and take advantage of EEM moving into a sideways range after a move down and use that premium to help my Diagonal.

I entered this Iron Condor with EEM trading at 40.14, an Implied Volatility of 62.08 and a probability of success of 67.40% which meant this was a good Iron Condor even if there was no hedge. Sometimes I will skew my hedge Iron Condor’s to protect my hedge, this trade however could have been traded on its own merit.

On 10/12 I purchased the 11/16 $42 Call and sold the $45 Call. I sold the $37 Put and purchased the $34 Put to cover. This gave me a $3.00 spread and a total risk of $490.00 with a potential profit of $110.00. My break even prices were $36.41 and $42.59.

On 11/1 after 20 days my GTC order hit and I closed this trade for a profit of $52.00 or about 10.61%. Not as good as I prefer but as a hedge it was fine.

Date EXP Strike Price Ct C/P Cost Balance
10/12/18 SO 11/16/18 $42.00 $0.44 2 C $88.00 $88.00
10/12/18 BO 11/16/18 $45.00 $0.05 2 C -$10.00 $78.00
10/12/18 SO 11/16/18 $37.00 $0.29 2 P $58.00 $136.00
10/12/18 BO 11/16/18 $34.00 $0.09 2 P -$26.00 $110.00
11/11/18 BC 11/16/18 $42.00 $0.10 2 C -$20.00 $90.00
11/11/18 SC 11/16/18 $45.00 $0.01 2 C $2.00 $92.00
11/11/18 BC 11/16/18 $37.00 $0.17 2 P -$42.00 $50.00
11/11/18 SC 11/16/18 $34.00 $0.01 2 P $2.00 $52.00
Profit of: $52.00

 

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