SMH Analysis

VanEck Vectors Semiconductor ETF (SMH)

I have entered a short iron condor spread on SMH, using options that trade for the last time 43 days hence, on March 20. The premium is a $1.27 credit and the stock at the time of entry was priced at $147.00

The profit zone for this position is between $157.27 on the upside and $133.27 on the downside.

The implied volatility rank (IVR) stands at 31.4.

Premium: $1.27 Expire OTM
SMH-iron condor Strike Odds Delta
Long 159.00 88.0% 13
Break-even 157.27 84.0% 17
Short 156.00 80.0% 21
Short 137.00 77.0% 21
Break-even 133.27 81.5% 17
Long 132.00 86.0% 13

The premium is 31.8% of the width of the position’s wings.

The profit zone covers a 7.0% move to the upside and a 10.3% move to the downside of the entry price, for total coverage of 17.3%

The risk/reward ratio is 2.1:1, with maximum risk of $273 and maximum reward of $127 per contract.

By Tim Bovee, Portland, Oregon, February 6, 2020


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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