IYR Analysis

iShares U.S. Real Estate ETF (IYR)

Update 5/24/2019: Ninth try is the charm. I exited IYR after attempting in nine sequential market sessions to get a fill on my order at 50% of maximum potential profit, my exit target, with a bid price of $0.19. One sticking point was that a leg of the short iron condor had become valueless. 

The fill came for a $0.19 return on the position. Shares were trading at $88.45 at the fill, up $1.35 from their entry price. The implied volatility rank declined by nine points, to 29, helping to bring the position to its profitable exit point.

The stock price meandered on a sideways course, reaching a high of $88.52 on May 16 and then exceeding that on the day my exit order was was filled, with a high of $88.56. In other words, it was a perfect short iron condor position: Little price movement, giving Theta time decay and a declining IV rank time to do their work.

Shares rose by 1.6% over 23 days, or a 25% annual rate. The options position produced a 100.0% return for a 1,587% annual rate.


I have entered a short iron condor spread on IYR, using options that trade for the last time 51 days hence, on June 21. The premium is a $0.38 credit and the stock at the time of entry was priced at $87.10.

The profit zone for this position is between $91.38 on the upside and $79.38 on the downside.

The implied volatility rank (IVR) stands at 35.

Premium: $0.38 Expire OTM
IYR-iron condor Strike Odds Delta
Long 93.00 93.0% 6
Break-even 91.38 88.0% 10.5
Short 91.00 83.0% 15
Puts
Short 82.00 85.0% 15
Break-even 79.38 88.5% 11.5
Long 79.00 92.0% 8

The premium is 15.2% of the width of the position’s wings.

The risk/reward ratio is 5.6:1.

By Tim Bovee, Portland, Oregon, May 1, 2019

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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Based on a work at www.timbovee.com.

3 thoughts on “IYR Analysis

  1. […] Despite the Sturm und Drang of the markets as the U.S.-China tariff war heats up, my six positions remain within their profit ranges. The options positions are all short iron condors with the short calls and puts set as close to a 20 delta at entry as the grid would allow. The stock symbols corresponding to my options positions, with links to the analyses, are  CGC, IYR, UNH, XBI, XLB and XOP. […]

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