Live: Monday, June 3, 2019

3:50 p.m. New York time

GDXJ order filled and analysis posted.

2:45 p.m. New York time

I looked at five other potential short iron condor trades, besides GDXJ (which still has no fill at a $0.21 ask), but I rejected them without a full analysis.

  • XLP, with an implied volatility rank of 53%, had a poor grid for matching my need for short options close to 16 delta, and the best reasonable risk/reward ratio I could get was 5.8:1, too high for my appetite. A pity, really. XLP is a fund that tracks consumer staples, and if we are as I suspect in the third phase of the business cycle, then consumer staples are a good place to be.
  • BIDU, 44% IVR is being panned mercilessly by analysts, and maybe the China markets are a bit risky these days for a direction neutral play such as an iron condor.
  • CSCO, 41% IVR has an ex-dividend date that I’d prefer to avoid.
  • EEM, 37% IVR, is an emerging markets fund with heavy exposure to China.
  • SPY, at long last, has regained some volatility, with a 35% IVR. But I already hold IWM, the Russell 2000, and they tend to closely mirror each others moves. I’d prefer a bit more diversification.

2:35 p.m. New York time

Full results at the exit of my short iron condor on XBI.

1:40 p.m. New York time

I’ve placed an entry order for a short iron condor on GDXJ, short $35 calls and short $36 puts, with the wings each $1 wide. Full analysis to follow if I get a fill.

1:30 p.m. New York time

XBI filled for a debit of $0.68 with shares at $80.92. Full results to follow.

12 p.m. New York time

With 18 days left until expiration, XBI has become profitable, at 23% of maximum potential profit, and I’ve put in an exit order for a debit of $0.63. We’re now in the “sudden death” phase for June options under my exit rules, so any profit gets an immediate exit order.

By Tim Bovee, Portland, Oregon, June 3, 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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