4:10 p.m. New York time

And at the closing bell,

• GLD closes at $140.18, below its short put strike of $141
• TLT, at $140.69, below its short put strike of $142

IWM, XLY  remain between the short strikes, and XOP has returned to between the strikes, having been above the short call strike earlier in the day.

12:55 p.m. New York time

TLT has dropped below the put options strike price, $142, in my short iron condor position. Action: Do nothing. Odds of expiring profitably, above the strike price, are 80%; unprofitably below, 20%. So far today the low has been $141.83.

11:50 a.m. New York time

GLD has moved below the put options strike price, $141, in my short iron condor position. Under my rules, I use the same tactic as with XOP (below): Do nothing for now.

The position is structured so that GLD has an 86% chance of expiring profitably above the put strike, giving a 14% chance of closing below, in the unprofitable zone.

The low so far today is $140.67.

9:50 a.m. New York time

And the first excitement in the OCT options cycle (although not very exciting).

The price of XOP shares has moved above the short call strike price of my short iron condor on that series. The strike is $24, and XOP triggered an alert when it moved up to $24.13. With 38 days to go before the options expire, on October 18, my response to the break above is to do nothing, and that rule holds until 21 days prior to expiration, on September 27.

And indeed, three minutes after breaking out, XOP withdrew to below the short call strike price. It may break out several times more today, but it will be of little significance at this point.

The position has an 81% chance of expiring within the short strikes (calls to the upside, puts to the downside), which means a 19% chance of closing above or below the range of the two strikes. Still good odds of a profitable play.

By Tim Bovee, Portland, Oregon, September 10, 2019

Read More »

SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

Update 9/27/2019: I’ve exited my short iron condor position on XOP 21 days prior to expiration. That point is management day, when I take the profits and run on all of my money-making positions, leaving only the unprofitable ones for me to figure how to squeeze out a dime or two. The exit cost a $0.35 debit,  leaving a $0.09 profit, with shares trading at $22.56, which is $0.81 above entry point.

The position produced 20.5% of maximum potential profit. My goal, as always for iron condors, was 50% of max, so I got out with less than half of what I had hoped for. The implied volatility rank was 43.0%, down 1.2 percentage points from the entry level. 

XOP rose steadily for 13 trading days after entry, culminating in an upward gap of nearly 12% that placed the price well above the short calls strike. That proved to be the peak, and XOP declined steadily until I exited, ending up easily within the profit range.

Shares showed a net rise of  3.7% over the 23-day holding period, or a +59% annual rate. The options position produced a 25.7% return for a +408% annual rate.

---

I have entered a short iron condor spread on XOP, using options that trade for the last time 44 days hence, on October 18. The premium is a $0.44 credit and the stock at the time of entry was priced at $21.75.

The profit zone for this position is between $24.44 on the upside and $17.44 on the downside.

The implied volatility rank (IVR) stands at 40.6%.

Premium:	$0.44	Expire OTM
XOP-iron condor	Strike	Odds	Delta
Long	26.00	95.0%	6
Break-even	24.44	88.0%	14
Short	24.00	81.0%	22
Puts
Short	19.00	80.0%	16
Break-even	17.44	86.5%	11
Long	17.00	93.0%	6

The premium is 22.0% of the width of the position’s wings.

The profit zone covers a 12.4% move to the upside and a 24.7% move to the downside of the entry price, for total coverage of 37.1%

The risk/reward ratio is 3.5:1, with maximum risk of $156 and maximum reward of $44 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

Read More »

The Consumer Discretionary Select Sector SPDR Fund (XLY)

Update 9/20/2019: XLY hit the point at which I manage, half of maximum potential profit, and I exited, doing better than expected by taking 51.7% of the max. The exit cost on the options was a $0.57 debit, a $0.61 profit, with shares trading for $121.03, up $1.11 from the entry price.

Shares rose for three days after entry and then traced a sideways pattern. The implied volatility rank at exit was 33.0%, down 14.2 from the IVR level at entry.

Shares rose by 0.9% over 16 days, or a +21% annual rate. The options position produced a 107.0% return for a +2114% annual rate.

---

I have entered a short iron condor spread on XLY, using options that trade for the last time 44 days hence, on October 18. The premium is a $1.18 credit and the stock at the time of entry was priced at $119.92.

The profit zone for this position is between $126.18 on the upside and $106.18 on the downside.

The implied volatility rank (IVR) stands at 44.2%.

Premium:	$1.18	Expire OTM
XLY-iron condor	Strike	Odds	Delta
Long	129.00	94.0%	6
Break-even	126.18	86.5%	14
Short	125.00	79.0%	22
Puts
Short	112.00	81.0%	18
Break-even	106.18	87.0%	12
Long	105.00	93.0%	6

The premium is 21.5% of the width of the position’s wings.

The profit zone covers a 5.2% move to the upside and a 12.9% move to the downside of the entry price, for total coverage of 18.2%

The risk/reward ratio is 3.7:1, with maximum risk of $432 and maximum reward of $118 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

Read More »

iShares 20+ Year Treasury Bond ETF (TLT)

Update 9/12/2019: I exited my short iron condor on TLT after the share price exceeded the lower breakeven point, moving into unprofitability so far that, at the rate of change at that time, it would take a 5.6 days to return to profitability. By my rules, that demands an exit. Shares were priced at $139.51 at exit, down $7.48 from the entry price, and the options positions produced a $2.84 debit, down $1.36 from the entry credit.

The TLT share price began to decline the day after I entered the position, and continued to decline three the next five trading days, breaking into unprofitability on the fifth day. The implied volatility rank declined by 7.2 during the holding period to 53.0%

Shares declined by 5.1% over eight days, or a -232% annual rate. The options position produced a -47.9% loss for a -2,185% annual rate.

---

I have entered a short iron condor spread on TLT, using options that trade for the last time 44 days hence, on October 18. The premium is a 1.48 credit and the stock at the time of entry was priced at $146.99

The profit zone for this position is between $155.48 on the upside and $137.48 on the downside.

The implied volatility rank (IVR) stands at 60.2%.

Premium:	$1.48	Expire OTM
TLT-iron condor	Strike	Odds	Delta
Long	162.00	95.0%	6
Break-even	155.48	87.5%	13.5
Short	154.00	80.0%	21
Puts
Short	142.00	77.0%	23
Break-even	137.48	85.5%	14.5
Long	136.00	94.0%	6

The premium is 21.1% of the width of the position’s wings.

The profit zone covers a 5.8% move to the upside and a 6.9% move to the downside of the entry price, for total coverage of 12.7%

The risk/reward ratio is 3.7:1, with maximum risk of $552 and maximum reward of $148 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

Read More »

SPDR Gold Shares (GLD)

Update 9/27/2019: I exited my short iron condor on GLD 21 days prior to expiration, the point at which, under my rules, I exit winning positions. I exited for a $1.54 debit so the profit is quite small, only five cents, with shares trading at $141.42, down $4.43 from the entry price.

The exit was at 3.1% of maximum potential profit with an implied volatility rank of 63.3%, down 16.5 percentage points from entry. The stock began a four-day decline on the second day after entry, ending below the put strike price in the short iron condor position, and then meandered along that boundary until the day I exited.

Shares fell by 3.0% over 23 days, or a -48% annual rate. The options position produced a 3.3% return for a +52% annual rate.

---

I have entered a short iron condor spread on GLD, using options that trade for the last time 44 days hence, on October 18. The premium is a $1.59 credit and the stock at the time of entry was priced at $145.85

The profit zone for this position is between $155.59 on the upside and 136.59 on the downside.

The implied volatility rank (IVR) stands at 79.8%.

Premium:	$1.59	Expire OTM
GLD-iron condor	Strike	Odds	Delta
Long	165.00	95.0%	6
Break-even	155.59	87.5%	13.5
Short	154.00	80.0%	21
Puts
Short	141.00	77.0%	23
Break-even	136.59	86.0%	14.5
Long	135.00	95.0%	6

The premium is 18.7% of the width of the position’s wings.

The profit zone covers a 6.7% move to the upside and a 6.8% move to the downside of the entry price, for total coverage of 13.5%

The risk/reward ratio is 4.3:1, with maximum risk of $691 and maximum reward of $159 per contract.

By Tim Bovee, Portland, Oregon, September 4, 2019

Read More »

1:10 p.m. New York time

XOP Analysis posted.

1:05 p.m. New York time

XLY Analysis posted.

12:55 p.m. New York time

TLT Analysis posted.

12:50 p.m. New York time

GLD Analysis posted.

12:30 p.m. New York time

And that’s a wrap on the new positions. I’ll start posting the analyses.

12:20 a.m. New York time

I’ve entered short iron condors on XOP and XLY, each expiring in 44 days on October 18.

Structures:

XOP, short the $24 call and $19 put, long the $26 call and $17 put. Credit: $0.44.

XLY, short the $125 call and $112 put, long the $129 call and $105 put. Credit: $1.18.

11:05 a.m. New York time

I’ve entered a short iron condor on TLT, 44 days prior to the October 18 expiration. the credit was $1.48. (Note that in the 10:50 a.m. item I mistakenly wrote “debit”. “Credit” is correct.)

The position is built from shorts, calls at $154 and puts and $152, and long wings, calls at $162 and puts at $136.

10:50 a.m. New York time

I’ve entered a short iron condor on GLD with 44 days until expiration on October 18, for a credit of $1.59. The structure is short strangle, $154 on the call and $141 on the put, and the long wings, $165 on the call and $135 on the put. Analysis to come.

By Tim Bovee, Portland, Oregon, September 4, 2019

Read More »

iShares Russell 2000 ETF (IWM)

Update 9/12/2019: I exited my short iron condor on IWM after the share price exceeded the upper breakeven point, moving into unprofitability so far that, at the rate of change at that time, it would take a day and a half to return to profitability. By my rules, that’s when I exit. Shares were priced at $157.32 at exit, up $10.73 from the entry price, and the options positions produced a $3.28 debit, down $1.38 from the entry credit.

The IWM share price began to rise the day after I entered the position, and continued to rise for four of the next six trading days, finally breaking into unprofitability on the sixth day. The implied volatility rank declined by 18.2 during the holding period to 25.0%

Shares rose by 7.3% over nine days, or a +297 annual rate. The options position produced a -42.1% loss for a -1,706% annual rate.

---

I have entered a short iron condor spread on IWM, using options that trade for the last time 45 days hence, on October 18. The premium is a $1.90 credit and the stock at the time of entry was priced at $146.59.

The profit zone for this position is between $156.91 on the upside and $126.91 on the downside.

The implied volatility rank (IVR) stands at 41.3.

Premium:	$1.90	Expire OTM
IWM-iron condor	Strike	Odds	Delta
Long	161.00	95.6%	5
Break-even	156.90	89.0%	12
Short	155.00	82.4%	19
Puts
Short	136.00	77.5%	20
Break-even	126.90	84.8%	13
Long	125.00	92.1%	6

The premium is 22.4% of the width of the position’s wings.

The profit zone covers a 7.0% move to the upside and a 15.5% move to the downside of the entry price, for total coverage of 22.5%

The risk/reward ratio is 3.5:1, with maximum risk of $660 and maximum reward of $190 per contract.

By Tim Bovee, Portland, Oregon, September 3, 2019

Read More »

4:30 p.m. New York time

And at the close, no fills on my three live trades. Tomorrow…

3:20 p.m. New York time

My short iron condor orders on GDXJ, XLY and XOP have yet to be filled. I shall leave them active, allowing any unfilled to expire at the close. Any fills, I’ll post the analysis after the closing bell.

My managed shares positions are all in uptrend mode on the Directional Index Indicator, so I am continuing to hold.

The line-up:

sym	slot #	entry $/share	sector
GLD	1	143.03	metals
SLV	2	15.88	metals
IYR	3	91.44	real estate
UNG	4	19.17	energy
BIDU	5	112.22	technology

2:40 p.m. New York time

I’ve placed an order for a short iron condor on XOP, asking for a $0.38 credit. The shorts are $24 on the calls and $18 on the puts, and the longs are $27 on the calls and $16 on the puts.

12:50 p.m. New York time

I’ve placed an order for a short iron condor on XLY, asking for a $1.27 credit. The shorts are $125 for the calls and $111 for the puts, when the long wings at $129 for the calls and $103 for the puts.

10:45 a.m. New York time

I’ve placed an entry order for a short iron condor on GDXJ, asking for a $0.95 credit, structured as a short call at $49 and short put at $38, and a long call at $54 and long put at $34. So, it hits the 18 delta for the call and 20 delta for the put.

10:25 a.m. New York time

IWM Analysis posted.

10:15 a.m. New York time

This is set-up day, 45 days before expiration of the next round of trades, which will use the monthly options expiring October 18.

I’ve entered a short iron condor on IWM for a $1.90 credit and shall post the analysis shortly.

By Tim Bovee, Portland, Oregon, September 3, 2019

Read More »

3:15 p.m. New York time

I’ve updated XLY Analysis with results.

2:50 p.m. New York time

I’ve exited my last remaining position built from options expiring September 20. The short iron condor was on XLY, and I exited for a $0.82 debit. Results to come shortly. The exit came 21 days prior to expiration, which under my rules is the day I manage all winning trades. In XLY’s case, the exit came at 9.9% of maximum potential profit.

By Tim Bovee, Portland, Oregon, August 30, 2019

Read More »

12:55 p.m. New York time

Some housekeeping notes (not quite up to Marie Kondo’s standards).

I have one options position remaining using the monthlys expiring September 20: XLY. It was entered into relatively late in cycle, with nine days remaining until the manage winners day, 21 days prior to the options’ expiration. Normally I aim for 20-23 days before manage winners day.

XLY is not showing a profit. My goal is to exit at 50% of maximum potential profit. On manage winners day, I’ll exit XLY if it is profitable to any degree. If it is not profitable, then I keep the position, but the rules for it change to the sudden death rule set: If it shows a profit to any degree, I exit, and if the underlying share price moves beyond the profit zone, then I exit if the time required for return to the zone is greater than one day, as measured by the Rate of Change metric.

I’ll start populating my accounts with short iron condors built from options expiring October 18 when we reach 45 days prior to expiration, which is September 3, a week from today.

See my options trading rules here.

By Tim Bovee, Portland, Oregon, August 27, 2019

Read More »