Live: Friday, July 26, 2019

3:10 p.m. New York time

And as expected, my paper-trade short iron condor position on IBM, part of an experiment in hedging short iron fly earnings plays, remains within the profit zone but unprofitable as of now. Under those circumstances, my sudden-death rules say to continue holding the position, exiting immediately if it becomes profitable, without regard to the degree of profitability. If it never becomes profitable, then I exit on the first trading day of expiration week. If the share price moves beyond the profit zone, special rules kick in that are described in my trading rules.

Meanwhile, Monday will be 53 days before the September 20 expiration of the next monthly options. My goal is to around 45 days prior to expiration, we we’ll have a bit of a break from iron condors to work on other things, such as a plan for making best use of the no-trading-fee Robinhood brokerage as a highly managed shares account. Working on it now.

2:45 p.m. New York time 

I’ve posted results for IYR.

2:20 p.m. New York time

I have exited IYR for a $0.36 debit, or 16.3% of maximum potential profit. Results to come.

10 a.m. New York time

Happy Exit Day, everyone!

Today is 21 days before expiration of the August options, and according to my trading rules, I am required to exit all profitable short iron condor positions today.

As it turns out, only one such position remains: IYR. At the opening bell, it was trading at a debit of $0.38; the target exit, 50% of maximum potential profit, is $0.22.

At the opening bell I placed an exit order at $0.22. Each hour I shall raise that order by two or three cents until I get a fill.

My thought experiment position in IBM is showing a loss, so it doesn’t come under the mandatory sale rules. Instead, as long as it stays unprofitable, I keep it alive until the Monday before the options expire and then exit. If it turns profitable, I exit immediately.

By Tim Bovee, Portland, Oregon, July 26, 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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