Live: Thursday, Sept. 12, 2019

7:40 a.m. New York time

I’ve updated the TLT Analysis with results of the trade.

7:30 a.m. New York time

I’ve updated the IWM Analysis with results of the trade.

3:42 p.m. New York time

And that’s a wrap until later in the day.

3:37 p.m. New York time

Exited IWM for a $3.28 debit with shares trading at $157.32.

3:35 p.m. New York time

Exited TLT for a $2.84 debit with shares trading at $138.51.

3:25 p.m. New York time

IWM  and TLT have both moved beyond their profit zones, and I have placed exit orders for a loss in each case. The decision goes like this:

  • Is the share price above the calls break even point or below the puts break even point?
    • Yes
      • Is the distance from the breakeven point divided by the rate of change metric greater than 1, meaning more than a day away from returning to the profit zone?
        • Yes: Exit
        • No: Do nothing
    • No
      • Do nothing.

By that calculation, IWM is 1.54 days above the breakeven point and TLT is 5.59 days below the breakeven point. If I succeed in existing, I shall post here but update the analyses with results after the close.

9:50 a.m. New York time

Speaking of rules, I’ve updated my Trading Rules section, and also the About section. Click on “Trading Rules” and “About” on the menu at the top of Private Trader.

9:45 a.m. New York time

Share prices on two of my short iron condor options positions remain beyond the strike zone — that profitable region between the short call strike and the short put strike. This morning, as at the close, IWM is above the short call strike, and TLT is below the short put strike. With 36 days to go until expiration, my rules require no action.

By Tim Bovee, Portland, Oregon, September 12, 2019

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Live: Wednesday, Sept. 11, 2019

4:10 p.m. New York time

And my managed shares holdings at the close.

sym slot # entry $/share sector
BOTZ 1 19.32 robotics
SLV 2 15.88 metals
EWM 3 28.25 int-malaysia
UNG 4 19.17 energy
UAE 5 14.18 int-uae

4:05 p.m. New York time

And at the closing bell, IWM remains above the short call strike price of my short iron condor, TLT remains below the short put strike, and GLD and XOP have returned to the range between the strikes.

XLY remains between the strikes, having never broken beyond the range.

11:30 a.m. New York time

Three of my short iron condor options positions are trading beyond their short strikes today:

  • GLD, below the put the strike
  • IWM and XOP, above the call strikes

Neither requires management at this point.

The call and put strikes are boundaries that issue an early warning when crossed. A position leaves the profit zone when it crosses the breakeven point, which has not yet happened for any of holdings for the OCT options cycle.

By Tim Bovee, Portland, Oregon, September 11, 2019

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Live: Tuesday, Sept. 10, 2019

4:10 p.m. New York time

And at the closing bell,

  • GLD closes at $140.18, below its short put strike of $141
  • TLT, at $140.69, below its short put strike of $142

IWM, XLY  remain between the short strikes, and XOP has returned to between the strikes, having been above the short call strike earlier in the day.

12:55 p.m. New York time

TLT has dropped below the put options strike price, $142, in my short iron condor position. Action: Do nothing. Odds of expiring profitably, above the strike price, are 80%; unprofitably below, 20%. So far today the low has been $141.83.

11:50 a.m. New York time

GLD has moved below the put options strike price, $141, in my short iron condor position. Under my rules, I use the same tactic as with XOP (below): Do nothing for now.

The position is structured so that GLD has an 86% chance of expiring profitably above the put strike, giving a 14% chance of closing below, in the unprofitable zone.

The low so far today is $140.67.

9:50 a.m. New York time

And the first excitement in the OCT options cycle (although not very exciting).

The price of XOP shares has moved above the short call strike price of my short iron condor on that series. The strike is $24, and XOP triggered an alert when it moved up to $24.13. With 38 days to go before the options expire, on October 18, my response to the break above is to do nothing, and that rule holds until 21 days prior to expiration, on September 27.

And indeed, three minutes after breaking out, XOP withdrew to below the short call strike price. It may break out several times more today, but it will be of little significance at this point.

The position has an 81% chance of expiring within the short strikes (calls to the upside, puts to the downside), which means a 19% chance of closing above or below the range of the two strikes. Still good odds of a profitable play.

By Tim Bovee, Portland, Oregon, September 10, 2019

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XOP Analysis

SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

Update 9/27/2019I’ve exited my short iron condor position on XOP 21 days prior to expiration. That point is management day, when I take the profits and run on all of my money-making positions, leaving only the unprofitable ones for me to figure how to squeeze out a dime or two. The exit cost a $0.35 debit,  leaving a $0.09 profit, with shares trading at $22.56, which is $0.81 above entry point.

The position produced 20.5% of maximum potential profit. My goal, as always for iron condors, was 50% of max, so I got out with less than half of what I had hoped for. The implied volatility rank was 43.0%, down 1.2 percentage points from the entry level. 

XOP rose steadily for 13 trading days after entry, culminating in an upward gap of nearly 12% that placed the price well above the short calls strike. That proved to be the peak, and XOP declined steadily until I exited, ending up easily within the profit range.

Shares showed a net rise of  3.7% over the 23-day holding period, or a +59% annual rate. The options position produced a 25.7% return for a +408% annual rate.


I have entered a short iron condor spread on XOP, using options that trade for the last time 44 days hence, on October 18. The premium is a $0.44 credit and the stock at the time of entry was priced at $21.75.

The profit zone for this position is between $24.44 on the upside and $17.44 on the downside.

The implied volatility rank (IVR) stands at 40.6%.

Premium: $0.44 Expire OTM
XOP-iron condor Strike Odds Delta
Long 26.00 95.0% 6
Break-even 24.44 88.0% 14
Short 24.00 81.0% 22
Puts
Short 19.00 80.0% 16
Break-even 17.44 86.5% 11
Long 17.00 93.0% 6

The premium is 22.0% of the width of the position’s wings.

The profit zone covers a 12.4% move to the upside and a 24.7% move to the downside of the entry price, for total coverage of 37.1%

The risk/reward ratio is 3.5:1, with maximum risk of $156 and maximum reward of $44 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

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XLY Analysis

The Consumer Discretionary Select Sector SPDR Fund (XLY)

Update 9/20/2019: XLY hit the point at which I manage, half of maximum potential profit, and I exited, doing better than expected by taking 51.7% of the max. The exit cost on the options was a $0.57 debit, a $0.61 profit, with shares trading for $121.03, up $1.11 from the entry price.

Shares rose for three days after entry and then traced a sideways pattern. The implied volatility rank at exit was 33.0%, down 14.2 from the IVR level at entry.

Shares rose by 0.9% over 16 days, or a +21% annual rate. The options position produced a 107.0% return for a +2114% annual rate.


I have entered a short iron condor spread on XLY, using options that trade for the last time 44 days hence, on October 18. The premium is a $1.18 credit and the stock at the time of entry was priced at $119.92.

The profit zone for this position is between $126.18 on the upside and $106.18 on the downside.

The implied volatility rank (IVR) stands at 44.2%.

Premium: $1.18 Expire OTM
XLY-iron condor Strike Odds Delta
Long 129.00 94.0% 6
Break-even 126.18 86.5% 14
Short 125.00 79.0% 22
Puts
Short 112.00 81.0% 18
Break-even 106.18 87.0% 12
Long 105.00 93.0% 6

The premium is 21.5% of the width of the position’s wings.

The profit zone covers a 5.2% move to the upside and a 12.9% move to the downside of the entry price, for total coverage of 18.2%

The risk/reward ratio is 3.7:1, with maximum risk of $432 and maximum reward of $118 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

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TLT Analysis

iShares 20+ Year Treasury Bond ETF (TLT)

Update 9/12/2019I exited my short iron condor on TLT after the share price exceeded the lower breakeven point, moving into unprofitability so far that, at the rate of change at that time, it would take a 5.6 days to return to profitability. By my rules, that demands an exit. Shares were priced at $139.51 at exit, down $7.48 from the entry price, and the options positions produced a $2.84 debit, down $1.36 from the entry credit.

The TLT share price began to decline the day after I entered the position, and continued to decline three the next five trading days, breaking into unprofitability on the fifth day. The implied volatility rank declined by 7.2 during the holding period to 53.0%

Shares declined by 5.1% over eight days, or a -232% annual rate. The options position produced a -47.9% loss for a -2,185% annual rate.


I have entered a short iron condor spread on TLT, using options that trade for the last time 44 days hence, on October 18. The premium is a 1.48 credit and the stock at the time of entry was priced at $146.99

The profit zone for this position is between $155.48 on the upside and $137.48 on the downside.

The implied volatility rank (IVR) stands at 60.2%.

Premium: $1.48 Expire OTM
TLT-iron condor Strike Odds Delta
Long 162.00 95.0% 6
Break-even 155.48 87.5% 13.5
Short 154.00 80.0% 21
Puts
Short 142.00 77.0% 23
Break-even 137.48 85.5% 14.5
Long 136.00 94.0% 6

The premium is 21.1% of the width of the position’s wings.

The profit zone covers a 5.8% move to the upside and a 6.9% move to the downside of the entry price, for total coverage of 12.7%

The risk/reward ratio is 3.7:1, with maximum risk of $552 and maximum reward of $148 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

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GLD Analysis

SPDR Gold Shares (GLD)

Update 9/27/2019I exited my short iron condor on GLD 21 days prior to expiration, the point at which, under my rules, I exit winning positions. I exited for a $1.54 debit so the profit is quite small, only five cents, with shares trading at $141.42, down $4.43 from the entry price.

The exit was at 3.1% of maximum potential profit with an implied volatility rank of 63.3%, down 16.5 percentage points from entry. The stock began a four-day decline on the second day after entry, ending below the put strike price in the short iron condor position, and then meandered along that boundary until the day I exited.

Shares fell by 3.0% over 23 days, or a -48% annual rate. The options position produced a 3.3% return for a +52% annual rate.


I have entered a short iron condor spread on GLD, using options that trade for the last time 44 days hence, on October 18. The premium is a $1.59 credit and the stock at the time of entry was priced at $145.85

The profit zone for this position is between $155.59 on the upside and 136.59 on the downside.

The implied volatility rank (IVR) stands at 79.8%.

Premium: $1.59 Expire OTM
GLD-iron condor Strike Odds Delta
Long 165.00 95.0% 6
Break-even 155.59 87.5% 13.5
Short 154.00 80.0% 21
Puts
Short 141.00 77.0% 23
Break-even 136.59 86.0% 14.5
Long 135.00 95.0% 6

The premium is 18.7% of the width of the position’s wings.

The profit zone covers a 6.7% move to the upside and a 6.8% move to the downside of the entry price, for total coverage of 13.5%

The risk/reward ratio is 4.3:1, with maximum risk of $691 and maximum reward of $159 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

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Live: Wednesday, Sept. 4, 2019

1:10 p.m. New York time

XOP Analysis posted.

1:05 p.m. New York time

XLY Analysis posted.

12:55 p.m. New York time

TLT Analysis posted.

12:50 p.m. New York time

GLD Analysis posted.

12:30 p.m. New York time

And that’s a wrap on the new positions. I’ll start posting the analyses.

12:20 a.m. New York time

I’ve entered short iron condors on XOP and XLY, each expiring in 44 days on October 18.

Structures:

XOP, short the $24 call and $19 put, long the $26 call and $17 put. Credit: $0.44.

XLY, short the $125 call and $112 put, long the $129 call and $105 put. Credit: $1.18.

11:05 a.m. New York time

I’ve entered a short iron condor on TLT, 44 days prior to the October 18 expiration. the credit was $1.48. (Note that in the 10:50 a.m. item I mistakenly wrote “debit”. “Credit” is correct.)

The position is built from shorts, calls at $154 and puts and $152, and long wings, calls at $162 and puts at $136.

10:50 a.m. New York time

I’ve entered a short iron condor on GLD with 44 days until expiration on October 18, for a credit of $1.59. The structure is short strangle, $154 on the call and $141 on the put, and the long wings, $165 on the call and $135 on the put. Analysis to come.

By Tim Bovee, Portland, Oregon, September 4, 2019

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IWM Analysis

iShares Russell 2000 ETF (IWM)

Update 9/12/2019I exited my short iron condor on IWM after the share price exceeded the upper breakeven point, moving into unprofitability so far that, at the rate of change at that time, it would take a day and a half to return to profitability. By my rules, that’s when I exit. Shares were priced at $157.32 at exit, up $10.73 from the entry price, and the options positions produced a $3.28 debit, down $1.38 from the entry credit.

The IWM share price began to rise the day after I entered the position, and continued to rise for four of the next six trading days, finally breaking into unprofitability on the sixth day. The implied volatility rank declined by 18.2 during the holding period to 25.0%

Shares rose by 7.3% over nine days, or a +297 annual rate. The options position produced a -42.1% loss for a -1,706% annual rate.


I have entered a short iron condor spread on IWM, using options that trade for the last time 45 days hence, on October 18. The premium is a $1.90 credit and the stock at the time of entry was priced at $146.59.

The profit zone for this position is between $156.91 on the upside and $126.91 on the downside.

The implied volatility rank (IVR) stands at 41.3.

Premium: $1.90 Expire OTM
IWM-iron condor Strike Odds Delta
Long 161.00 95.6% 5
Break-even 156.90 89.0% 12
Short 155.00 82.4% 19
Puts
Short 136.00 77.5% 20
Break-even 126.90 84.8% 13
Long 125.00 92.1% 6

The premium is 22.4% of the width of the position’s wings.

The profit zone covers a 7.0% move to the upside and a 15.5% move to the downside of the entry price, for total coverage of 22.5%

The risk/reward ratio is 3.5:1, with maximum risk of $660 and maximum reward of $190 per contract.

By Tim Bovee, Portland, Oregon, September 3, 2019

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Live: Tuesday, Sept. 3, 2019

4:30 p.m. New York time

And at the close, no fills on my three live trades. Tomorrow…

3:20 p.m. New York time

My short iron condor orders on GDXJ, XLY and XOP have yet to be filled. I shall leave them active, allowing any unfilled to expire at the close. Any fills, I’ll post the analysis after the closing bell.

My managed shares positions are all in uptrend mode on the Directional Index Indicator, so I am continuing to hold.

The line-up:

sym slot # entry $/share sector
GLD 1 143.03 metals
SLV 2 15.88 metals
IYR 3 91.44 real estate
UNG 4 19.17 energy
BIDU 5 112.22 technology

2:40 p.m. New York time

I’ve placed an order for a short iron condor on XOP, asking for a $0.38 credit. The shorts are $24 on the calls and $18 on the puts, and the longs are $27 on the calls and $16 on the puts.

12:50 p.m. New York time

I’ve placed an order for a short iron condor on XLY, asking for a $1.27 credit. The shorts are $125 for the calls and $111 for the puts, when the long wings at $129 for the calls and $103 for the puts.

10:45 a.m. New York time

I’ve placed an entry order for a short iron condor on GDXJ, asking for a $0.95 credit, structured as a short call at $49 and short put at $38, and a long call at $54 and long put at $34. So, it hits the 18 delta for the call and 20 delta for the put.

10:25 a.m. New York time

IWM Analysis posted.

10:15 a.m. New York time

This is set-up day, 45 days before expiration of the next round of trades, which will use the monthly options expiring October 18.

I’ve entered a short iron condor on IWM for a $1.90 credit and shall post the analysis shortly.

By Tim Bovee, Portland, Oregon, September 3, 2019

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