C Trade

Citigroup Inc. (C)

I have entered a short iron condor spread on C, using options that trade for the last time 36 days hence, on February 18. The premium is a $1.82 credit per contract share and the stock at the time of entry was priced at $68.21.

The Implied Volatility Ratio stands at 27.1%

Premium:$1.82Expire OTM
C-iron condorStrikeOddsDelta
Calls
Long75.0092.0%10
Break-even71.8282.5%20.5
Short70.0073.0%31
Puts
Short65.0061.0%34
Break-even61.8273.5%23
Long60.0086.0%12

The premium is 36.4% of the width of the positions short and long spread. The profit zone covers a 5.3% move to the upside and a 10.3% move to the downside.

The risk/reward ratio is 1.7:1, with maximum risk of $318 and maximum reward of $182 per contract.

How I chose the trade. The trade was placed to coincide with C’s earnings announcement, before the opening bell on the day after entry. The short strikes were set to coincide with the expected move of $1.64 either way, based on options pricing, which gives a price range of $65.46 to $68.64.

By Tim Bovee, Portland, Oregon, January 13, 2022

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.

License
Creative Commons License

All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.

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