IWM Analysis

iShares Russell 2000 ETF (IWM)

Update 6/25/2019: IWM reached 50% of maximum potential profit and I exited the short iron condor position. During the month (plus change) holding period, IWM traced a wave to the upside and then began a decline. The implied volatility rank (IVR) decline by 4.4 to 23.5%.

The position produced a profit of $0.31 per share as the share price showed a net rose from entry of $0.91, although while I held the position it covered a bit more real-estate, peaking at $152.08, or $1.18 above the price at entry. In other words, it was a perfectly well behaved iron condor, of the sort I love to see.

Shares rose by 0.6% over 32 days, or a +7% annual rate. The options position produced a 100.0% return for a +1,141% annual rate.

I have entered a short iron condor spread on IWM, using options that trade for the last time 56 days hence, on July 19. The premium is a $0.62 credit and the stock at the time of entry was priced at $150.90.

The profit zone for this position is between $159.62 on the upside and $138.62 on the downside.

The implied volatility rank (IVR) stands at 28.

Premium: $0.62 Expire OTM
IWM-iron condor Strike Odds Delta
Long 161.00 87.0% 13
Break-even 159.62 84.0% 16
Short 159.00 81.0% 19
Short 140.00 80.0% 19
Break-even 138.62 82.0% 17
Long 138.00 84.0% 15

The premium is 31.0% of the width of the position’s wings.

The risk/reward ratio is 2.2:1.

By Tim Bovee, Portland, Oregon, May 24, 2019


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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