IShares Russell 2000 ETF (IWM)

Lot 2023-1

Update 11/1/2023: I exited my short iron fly spread on November 1 expiration day, for a $1.36 debit per contract/share, a profit before fees of $8.00 per contract. Shares were trading at $164.38, the same as the entry level.

The Implied Volatility Rank at exit was 37.6%, down 3.6 points from the entry level.

The shares price was unchanged.. The options position produced a 5.9% return for a +2,147% annual rate.

---

I have entered a short iron fly position on IWM, using options that trade for the last time the next day, November 1. The premium is a $1.44 credit per contract share and the stock at the time of entry was priced at $164.38.

The Implied Volatility Ratio stood at 41.2%.

Premium:	$1.44	Expire OTM
IWM-iron fly	Strike	Odds	Delta
Calls
Long	167.00	81.0%	20
Break-even	166.44	66.5%	33.5
Short	165.00	52.0%	47
Puts
Short	165.00	47.0%	53
Break-even	164.44	61.5%	38.5
Long	163.00	76.0%	24

The premium is 72% of the width of each of the short/long spreads. The profit zone covers a 1.3% move to the upside and a 1.2% move to the downside.

The risk/reward ratio is 0.4 :1, with maximum risk of $56 and maximum reward of $144 per contract.

By Tim Bovee, Portland, Oregon, October 31, 2023

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

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.