Symbols traded today: IWM (37DTE)

I entered a longer term short iron condor position on IWM 37 days before expiration and exited with 22 days to go, for an 11.6% loss. The expectation for the position was that volatility would decline, boosting the return. Volatility rose instead. My method is to manage or exit a position 21 days before expiration. I exited a day early to avoid holding the position through the next release of employment numbers, on January 5 befor ethe opening bell.

IWM short Iron Condor

The position expires in 37 days, on January 26, 2024. My intent is to exit the position at 50% profit or at 21 days before expiration, on January 5, whatever the profit or loss. Also, I’ve penciled in two prices that may trigger an exit if they should be crossed, near the expected move based on options pricing. The trigger points are 209.97 to the upside and 192.71 to the downside.

One change that I’ve made to my prior practice for such trades is to tighten the long options, which limit my potential losses. This reduces the risk/reward ratio.

LOT:	8	ENTRY DATE:	12/20/2023
		EXIT DATE:	1/4/2024
		DAYS HELD:	15

Entry and Exit

METRIC	CREDIT	DEBIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Options premium	$ 0.76	$ 0.86	$ (0.10)	-11.6%	-281%
METRIC	ENTRY	EXIT	CHANGE	CHANGE %	ANNUALIZED CHANGE %
Stock price	$ 201.34	$ 194.58	$ 6.76	-3.36%	-82%
Impllied Volatility Rate	31.8	46.5	14.7
Days to expiration	37	22

The structure of the position

STRUCTURE	STRIKE	ODDS EXPIRE OTM	DELTA	IN PRICE	OUT PRICE	NET PRICE
Calls
Long	213.00	80.0%	20	$ (1.61)	$ 0.26	$ (1.35)
Break-even	211.76	78.0%	22
Short	211.00	76.0%	24	$ 2.01	$ (0.38)	$ 1.63
Puts
Short	193.00	80.0%	20	$ 1.69	$ (3.22)	$ (1.53)
Break-even	191.76	82.0%	18
Long	191.00	84.0%	16	$ (1.33)	$ 2.48	$ 1.15
						======
				`	NET TOTAL:	$ (0.10)

Risk and Reward

Per contract:
Reward	76.00
Risk	124.00
R/R Ratio (n:1)	1.6

By Tim Bovee, Portland, Oregon, December 20, 2023 / January 5, 2024

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.