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.

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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

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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

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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

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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

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3:40 p.m. New York time

SPY results posted.

3:25 p.m. New York time

My exit order on my long iron condor on SPY has been filled for $0.76. Results to come.

11:25 a.m. New York time

I’ve updated the analysis of my GDX iron condor with results.

11:05 a.m. New York time

I placed an exit order on my GDX short iron condor. It was filled for a $0.22 debit, or 50% of maximum potential profit. Results to come.

10:50 a.m. New York time

In my options portfolio, I put in an exit order on my short on iron condor on SPY for a $0.76 debit, which is as yet unfilled.

In my managed shares portfolio, XLU gave a sell signal late Friday on the Directional Movement Index (DMI), and I exited for $61.76, a return of 0.4% over six days, or a +24% annual rate.

I replaced it with UNG, which a DMI buy signal this morning. The entry price was $19.17.

The new line-up is still a bit heavy on the metals, but that’s the nature of the market these days.

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

By Tim Bovee, Portland, Oregon, August 26, 2019

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1:25 p.m. New York time

I’ve updated my QQQ analysis with results.

10:35 a.m. New York time

My short iron condor position on QQQ hit 50% of maximum potential profit, and I’ve exited for a $0.93 debit. Results to come.

By Tim Bovee, Portland, Oregon, August 23, 2019

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10:40 a.m. New York time

I’ve entered a short iron condor position on XLY, selecting it as having the top implied volatility rank of any prospect on my list that isn’t a metal or an energy play. The position replaces IWM, which I exited yesterday for half of maximum potential profit. The position has 30 days until expiration, nearly two weeks short of my preferred 42 days.

By Tim Bovee, Portland, Oregon, August 21, 2019

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The Consumer Discretionary Select Sector SPDR Fund (XLY)

Update 8/30/2019: I exited my short iron condor position on XLY for a small profit at my normal time for managing winning trades: 21 days before the options expire. The exit cost was a $0.82 debit, providing a $0.09 profit, with shares trading at $119.54, up $0.19 from the price at entry. The exit price was at 9.9% of maximum potential profit.

Three days after I entered the position the underlying share price fell sharply down to $116.49, turned unprofitable as it fluctuated around the $118 level before rising to slightly above my entry point and returning to profitability.

Shares rose by 0.2% over nine days, or a 6% annual rate. The options position produced an 11.0% return for a 445% annual rate.

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I have entered a short iron condor spread on XLY, using options that trade for the last time 30 days hence, on September 20. The premium is a $0.91 credit and the stock at the time of entry was priced at $119.35.

The profit zone for this position is between $124.41 on the upside and $108.41 on the downside.

The implied volatility rank (IVR) stands at 36.9.

Premium:	$0.91	Expire OTM
XLY-iron condor	Strike	Odds	Delta
Long	127.00	97.0%	6
Break-even	124.41	89.0%	12.5
Short	123.50	81.0%	19
Puts
Short	114.00	81.0%	19
Break-even	108.91	87.5%	12.5
Long	108.00	94.0%	6

The premium is 19.2% of the width of the position’s wings.

The profit zone covers a 4.2% move to the upside and a 9.6% move to the downside of the entry price, for total coverage of 13.8%

The risk/reward ratio is 4.2:1, with maximum risk of $384 and maximum reward of $91 per contract.

By Tim Bovee, Portland, Oregon, August 21, 2019

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2:05 p.m. New York time

I’ve updated IWM Analysis with results.

1:50 p.m. New York time

I’ve exited my short iron condor options position on IWM at 50% of maximum potential profit; a $0.90 debit. Results to come.

12:30 p.m. New York time

Three of my short iron condor options positions — IWM, QQQ and SPY — have moved within 10 percentage points of my target, which is 50% of maximum potential profits. I’ve entered exit orders on all three, at the 50% mark, which have not yet been filled.

10:20 a.m. New York time

I’ve moved beyond my reliance on exchange traded funds for my manage shares portfolio, entering a position on BIDU, the Chinese Internet company, for $112.22 per share. It’s something in a nature of an experiment and the extent to which I’ll mix in shares in individual companies will depend upon the results I get from these occasional forays. The broader universe from which I choose has in this case allowed me to fill the last of my five slots, which have been difficult to fill since the market declines of early August.

The entry signal on the DMI was on Monday after an earnings announcement.

The line-up:

sym	slot #	entry $/share	sector
GLD	1	143.03	metals
SLV	2	15.88	metals
IYR	3	91.44	real estate
XLU	4	61.52	utilitiies
BIDU	5	112.22	technology

9:50 a.m. New York time

I’ve entered a shares position on XLU within my managed shares portfolio. The entry price was $61.52 per share. The entry rationale was a bull signal on Monday from the DMI indicator backed by a drop into oversold territory and then a rise back to the neutral zone on the DMI Stochastic Extreme indicator.

By Tim Bovee, Portland, Oregon, August 20, 2019

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12:50 p.m. New York time

IYR gave a buy signal today on the Directional Movement Indicator (DMI) today, and I have added the symbol to my managed shares portfolio for $99.44 a share. The DMI Stochastic Extreme indicator was at 29.9 at purchase, above oversold territory (10 and below) and rising.

I still have two empty slots in the portfolio in the wake of the broad market declines earlier in the week.

The line-up:

sym	slot #	entry $/share	sector
GLD	1	143.03	metals
SLV	2	15.88	metals
IYR	3	91.44	real estate
(empty)	4
(empty)	5

By Tim Bovee, Portland, Oregon, August 16, 2019

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