IYR 9/24/18 Broken Wing Iron Condor

IYR – 09/24/18 – Broken Wing Condor

I decided to place a Broken Wing Condor in IYR after a move down with no risk to the upside. I felt it had its run down and now was due for a rebound. Turns out I was wrong, that is the problem with trying to pick a direction.

With IYR trading at $80.71 I sold the 11/16 $80 Call and purchased the $81 Call. I sold the $80 Put and purchased the $76 Put to cover my long Put. My risk was about $500.00 with a potential max profit of $292.00 if held to expiration and the security finished at the optimal price of $80.11. Implied volatility was at 28.67 but appeared to be rising, if I was right about the price moving back up then the implied volatility would start to go down which is what I would prefer.

As I stated above, turns out I was wrong about the security starting a move up. I had varying degrees of loss for almost the entire trade. On 11/5 with a move up in IYR I decided to take advantage of the move and close the position with IYR trading at $78.71.

I ended up with a loss of $52.00 or about 10.4%. Based on my rules I probably should have just let this trade play out, but sometimes I don’t follow my own rules. Trading is a little science and a little art.

The best reason I can give you for why I did not follow my own rules is two part. One, this trade had been at a much greater loss and had not preformed well from the beginning. Two, I had been in this trade for 42 days which is a long time for these. It was time to close.

Date EXP Strike Price Ct C/P Cost Balance
09/24/18 SO 11/16/18 $80.00 $1.60 2 C $320.00 $320.00
09/24/18 BO 11/16/18 $81.00 $1.04 2 C -$208.00 $112.00
09/24/18 SO 11/16/18 $80.00 $1.45 2 P $290.00 $402.00
09/24/18 BO 11/16/18 $76.00 $0.51 2 P -$110.00 $292.00
11/05/18 BC 11/16/18 $80.00 $0.49 2 C -$98.00 $194.00
11/05/18 SC 11/16/18 $81.00 $0.22 2 C $44.00 $238.00
11/05/18 BC 11/16/18 $80.00 $1.76 2 P -$352.00 -$114.00
11/05/18 SC 11/16/18 $76.00 $0.35 2 P $62.00 -$52.00
Profit of: -$52.00


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