XLY Analysis

The Consumer Discretionary Select Sector SPDR Fund (XLY)

Update 11/26/2019My short iron condor options position on XLY reached 50% maximum potential profit, and I exited for a $0.76 debit. Shares were trading at $121.33, down $0.64 from the entry price.

XLY traded sideways within a narrow range during the period I held the position. The implied volatility rank was 25.9% at the close, down 4.3 percentage points from its level at entry.

Shares declined by 0.5% over 21 days, or a -9% annual rate. The options position produced a 100.0% return for a +1,738% annual rate.

I have entered a short iron condor spread on XLY, using options that trade for the last time 45 days hence, on December 20. The premium is a $1.66 credit and the stock at the time of entry was priced at $121.97.

The profit zone for this position is between $126.52 on the upside and $114.52 on the downside.

The implied volatility rank (IVR) stands at 30.2%.

Premium: $1.52 Expire OTM
XLY-iron condor Strike Odds Delta
Long 128.00 90.0% 10
Break-even 126.52 80.5% 19
Short 125.00 71.0% 28
Short 119.00 69.0% 31
Break-even 114.52 79.5% 20.5
Long 113.00 90.0% 10

The premium is 33.8% of the width of the position’s wings.

The profit zone covers a 3.8% move to the upside and a 6.4% move to the downside of the entry price, for total coverage of 10.2%

The risk/reward ratio is 2:1, with maximum risk of $298 and maximum reward of $152 per contract.

By Tim Bovee, Portland, Oregon, November 5, 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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