SPX Iron Condor Look Back Trade

SPX – 6/23/16

I placed this Iron Condor the day before the Britain European Union exit vote. This could have been considered a high risk trade, except I legged into it. I sold my Calls on 6/23 and waited until 6/24 to sell my Puts. I was able to take advantage of the market panic sell, since I believed it would bounce back up quickly I was happy to do so. In the end this was one of my best Condor trades. Things worked out better than I could have hoped as you will see.

SPX was trading at $2,104.48 on 6/23/16. I sold 10 August 2016 expiration $2215 Calls and purchased the $2240 Calls to cover them for about $1.80 per contract. My risk was $23,304.90 with a potential profit of $1,695.10 on just my calls. On 6/24 the SPX had dropped to $2,051.00 and volatility was moving up because of the drop. Because of the volatility being so high I was able to sell the August 2016 $1760 Puts and buy the August 2016 $1735 Puts to cover them for about $1.00 in more premium. The high volatility allowed me to pick a strike $291.00 away from where the SPX was currently trading and bring in another $1,395.10 in premium making my potential profit $3,090.20 and reducing my risk to $21,909.80. If I held until expiration my return would be about 14%.

After I my Puts filled I placed a GTC order to close this position at a debit of $1.25. On 6/28 with the market rebounding nicely my GTC order filled and I pocketed $1,719.90 in just 5 days. A return of about 7.5% on my initial risk of $23,304.90. They do not all work out this way, but when they do it is great.

Date

Symb

Exp

Strike

Price

Cont

Type

Cost

Balance

06/23/16

SPX

BTO

AUG16

2240

-$2.00

10

Call

-$2,052.50

-$2,052.50

06/23/16

SPX

STO

AUG16

2215

$3.80

10

Call

$3,747.60

$1,695.10

06/24/16

SPX

BTO

AUG16

1735

-$10.00

10

Put

-$10,052.50

-$8,357.40

06/24/16

SPX

STO

AUG16

1760

$11.00

10

Put

$11,447.60

$3,090.20

06/28/16

SPX

BTC

AUG16

2215

-$0.55

10

Call

-$580.02

$2,510.18

06/28/16

SPX

BTC

AUG16

1760

-$6.25

10

Put

-$6,280.10

-$3,769.92

06/28/16

SPX

STC

AUG16

1735

$5.20

10

Put

$5,169.90

$1,399.98

06/28/16

SPX

STC

AUG16

2240

$0.35

10

Call

$320.10

$1,720.08

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