The Consumer Discretionary Select Sector SPDR Fund (XLY)

Update 10/15/2019: My short iron condor position on XLY reached 50% of its maximum potential profit, and I exited for a $0.46 debit, with shares trading at $121.00, up $1.28 from their price when I opened the position.

XLY fell on the day I opened the position, traded sideways for seven days, and then rose to above the entry level. The implied volatility rank fell by 5.5 points, from 38.8% to 33.3%.

Shares rose by 1.1% over 14 days, or a +28% annual rate. The options position produced a 100.0% return for a +2,607% annual rate.

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I have entered a short iron condor spread on XLY, using options that trade for the last time 45 days hence, on November 15. The premium is a $0.92 credit and the stock at the time of entry was priced at $119.72

The profit zone for this position is between $126.92 on the upside and $10392 on the downside.

The implied volatility rank (IVR) stands at 38.8%.

Premium:	$0.92	Expire OTM
XLY-iron condor	Strike	Odds	Delta
Long	129.00	95.0%	5
Break-even	126.92	90.0%	10.5
Short	126.00	85.0%	16
Puts
Short	111.00	82.0%	16
Break-even	103.92	88.0%	11
Long	103.00	94.0%	6

The premium is 16.7% of the width of the position’s wings.

The profit zone covers a 6.0% move to the upside and a 15.2% move to the downside of the entry price, for total coverage of 21.2%

The risk/reward ratio is 5:1, with maximum risk of $458 and maximum reward of $92 per contract.

By Tim Bovee, Portland, Oregon, October 1, 2019

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iShares Russell 2000 ETF (IWM)

Update 10/15/2019: My short iron condor position on IWM reached 50% of its maximum potential profit, and I exited for a $0.60 debit with shares trading at $150.08, up $0.94 from its price when the position was opened.

IWM fell on the day I entered the position, traded sideways for seven days and then rose again, to a level slightly below its entry-day peak. The implied volatility rank fell 15.4 points, from 26.9% to 11.5%.

Shares showed a net rise of 0.6% over 14 days, or a +16% annual rate. The options position produced a 100.0% return for a +2,607% 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 November 15. The premium is a $1.20 credit and the stock at the time of entry was priced at $149.14.

The profit zone for this position is between $161.20 on the upside and $129.20 on the downside.

The implied volatility rank (IVR) stands at 26.9%.

Premium:	$1.20	Expire OTM
IWM-iron condor	Strike	Odds	Delta
Long	164.00	95.0%	6
Break-even	161.20	91.0%	10
Short	160.00	87.0%	14
Puts
Short	138.00	83.0%	16
Break-even	129.20	88.5%	11
Long	128.00	94.0%	6

The premium is 17.1% of the width of the position’s wings.

The profit zone covers an 8.1% move to the upside and a 15.4% move to the downside of the entry price, for total coverage of 23.5%

The risk/reward ratio is 4.8:1, with maximum risk of $580 and maximum reward of $121 per contract.

By Tim Bovee, Portland, Oregon, October 1, 2019

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iShares 20+ Year Treasury Bond ETF (TLT)

Update 10/23/2019: I’ve exited my short iron condor position on TLT as it attained 50% of maximum potential profit. I closed the position for a $0.41 debit, half of the $0.82 credit I received upon entry. Shares at exit were trading at $140.16, down $2.95 from their entry level.

TLT rode a roller coaster during the lifespan of my position. It rose sharply for four days and then declined for 11 days to below its price when I entered the position, thereafter recovering for two days and triggering my exit. The implied volatility rank at exit was 40.8%, down 25.6 points from the entry level.

Shares had a net decline of 2.1% over 22 days, or a -34% annual rate. The options position produced a 100.0% return for a +1,659% annual rate.

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I have entered a short iron condor spread on TLT, using options that trade for the last time 45 days hence, on November 15. The premium is a $0.82 credit and the stock at the time of entry was priced at $143.52.

The profit zone for this position is between $151.82 on the upside and $132.82 on the downside.

The implied volatility rank (IVR) stands at 66.4%.

Premium:	$0.82	Expire OTM
TLT-iron condor	Strike	Odds	Delta
Long	157.00	94.0%	6
Break-even	151.82	89.0%	11.5
Short	151.00	84.0%	17
Puts
Short	136.00	85.0%	15
Break-even	132.82	89.5%	10.5
Long	132.00	94.0%	6

The premium is 16.4% of the width of the position’s wings.

The profit zone covers a 5.8% move to the upside and an 8.1% move to the downside of the entry price, for total coverage of 13.8%

The risk/reward ratio is 5.1:1, with maximum risk of $418 and maximum reward of $82 per contract.

By Tim Bovee, Portland, Oregon, October 1, 2019

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VanEck Vectors Gold Miners ETF  (GDX)

Update 10/16/2019: I exited my short iron condor position on GDX for 51.1% of maximum potential profit. The exit debit was $0.22, which is $0.23 below the $0.45 credit received at entry, with shares trading at $26.50, down nine cents from the entry level.

GDX traded sideways in a $2 range during the lifespan of the position. Implied volatility was 50.0% at exit, down 22.9 points from the entry level.

Shares fell by 0.3% over 15 days, or a -8% annual rate. The options position produced a 104.6% return for a +2,544% annual rate.

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I have entered a short iron condor spread on GDX, using options that trade for the last time 45 days hence, on November 15. The premium is a $0.45 credit and the stock at the time of entry was priced at $27.17.

The profit zone for this position is between $30.45 on the upside and $22.45 on the downside.

The implied volatility rank (IVR) stands at 72.9%.

Premium:	$0.45	Expire OTM
GDX-iron condor	Strike	Odds	Delta
Long	33.00	95.0%	6
Break-even	30.45	90.0%	12
Short	30.00	85.0%	18
Puts
Short	24.00	82.0%	16
Break-even	22.45	88.0%	10.5
Long	22.00	94.0%	5

The premium is 18.0% of the width of the position’s wings.

The profit zone covers a 12.1% move to the upside and a 21.0% move to the downside of the entry price, for total coverage of 33.1%

The risk/reward ratio is 4.6:1, with maximum risk of $205 and maximum reward of $45 per contract.

By Tim Bovee, Portland, Oregon, October 1, 2019

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2:50 p.m. New York time

XBI Analysis posted.

And that’s a wrap for the November setup, with six short iron condor positions, on GDX, IWM, TLT, XBI, XLY and XOP. Management day will be October 25, which is 21 days prior to expiration, the day on which I sell all remaining profitable positions. Expiration is November 15.

2:20 p.m. New York time

XOP Analysis posted.

2 p.m. New York time

I’ve posted XLY Analysis after the adjusting the order in order to get a fill. Note that the short put strike was moved a dollar lower to accomodate a price change after I entered the order.

1:30 p.m. New York time

I’ve posted IWM Analysis after my short iron condor entry order was filled.

12:30 p.m. New York time

And as the final entry order of the day, a short iron condor on XBI, structured +p62 -p67 -c83 +c88, with an ask of a $1.08 credit.

12:15 p.m. New York time

I’ve placed an entry order for a short iron condor on IWM, structured as +128p -138p -160c +164c, asking for a $1.20 credit.

11:10 a.m. New York time

TLT Analysis posted after my short iron condor order was filled at the asking price.

10:55 a.m. New York time

Entry order for a short iron condor on TLT placed. The structured is +p17 -p19 -c25 +c27, with a credit ask of $0.39.

10:40 a.m. New York time

I’ve placed an entry order for a short iron condor on TLT, structured as +p32 -p36 -c51 +c57. The credit ask is $0.82.

10:20 a.m. New York time

GDX Analysis posted after my short iron condor order was filled.

10:10 a.m. New York time

I’ve placed an entry order for a short iron condor on XLY, structured as +p105 -p112 -c126 +c129, asking for a credit of $0.94.

10 a.m. New York time

Today is entry day for my options trading, 45 days prior to expiration of the November 15, 2019 monthlies. In describing the structure of each short iron condor order, I’ll prefix long options with a + and short with a -, each followed “p” for put or “c” for call, and the strike price.

I’ve placed my first entry order, for GDX, structured as +p22 -p24 -c30 +c33. My asking price is $0.45. No fill as of yet.

By Tim Bovee, Portland, Oregon, October 1, 2019

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1:50 p.m. New York time

I’ve updated XOP Analysis with results.

1:30 p.m. New York time

I’ve updated GLD Analysis with results.

12:50 p.m. New York time

I’ve exited GLD for a $1.54 debit, or 3.1% of maximum potential profit. An update with results is on its way.

This was the last of my OCT options holdings. Next step is set up for the NOV options positions, all of them short iron condors expiring November 15. I’ll be entering those positions on Tuesday, October 1, which is 45 days prior to expiration.

9:45 a.m. New York time

This is management day for my OCT options, 21 days before expiration, the day when I exit all profitable positions, however small that profit might be.

I’ve exited XOP for a $0.35 debit, or 20.5% of maximum potential profit. I shall update the analysis with results later this morning.

My other holding GLD, dropped slightly below the short put strike price, moving the position into loss territory. I’ll keep a close watch on it today and exit if it moves back to profit.

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

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11:50 a.m. New York time

I shall spend much of October in Japan, a time zone that poses challenges to a U.S.-baed traveler: The opening bell rings at 10:30 p.m. and the closing bell, at 5 a.m. Not exactly my preferred schedule.

The schedule doesn’t pose much of a problem to my options trading. I’ll be entering my November options positions three days before my departure, and since I know my exit point — 50% of maximum potential profit — I’ll set good-till-cancelled exit orders and let them sit until management day, 21 days before expiration. I’ll still be in Japan on that day, so I’ll stay up late, make the exits, and write up the results during the next day, which will be at night in the U.S.

The managed shares positions require more intensive management, preferably during the market day. I’ve solved that by shutting down the five positions — BOTZ, EPI, EWL, GDXJ and UNG — replacing them with REITs that will be going ex-dividend soon — OHI, NRZ and STWD. All have 100% buy ratings from Morningstar.

The managed shares plans hasn’t been producing a profit over and all — positions tend to be nickel-and-dimed with losses — so I’ll use some of my time abroad thinking about a better way to handle the long shares portion of my holdings.

While abroad, as is the case when I’m home, I’ll post when I have something to say, rather than posting daily just to maintain a presence.

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

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11:45 a.m. New York time

My options reach the 21st day prior to expiration on Friday, and on that day I shall exit the profitable positions and retain the losers, but under my sudden death rules. The see options trading rules here.

Among my managed shares, XLV proved to be a head fake. I entered it on a buy signal on Friday and it gave a sell signal on Monday. I’ve replaced with GDXJ, the highest beta of the gold ETFs, all of which gave buy signals today.

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

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2:30 p.m. New York time

I’ve updated XLY Analysis with results.

2:05 p.m. New York time

Managed shares: UAE out on a sell signal, replaced by EPI.

1:50 p.m. New York time

My XLY short iron condor exit order was filled at $0.57, two cents better than my limit, with shares going for $121.03. I’ll update the analysis shortly.

12:55 p.m. New York time

My XLY short iron condor position has come close to its exit point — 50% of maximum potential profit — and I have entered an exit order at $0.59. The position is presently trading at $0.61. No fill yet.

10:05 a.m. New York time

In my managed shares portfolio, XLP showed a sell signal on the directional movement index. I replaced it with XLV.

Two of the stocks underlying short iron condor positions went ex-dividend today. None of my XLY or XOP options was assigned.

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

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12:40 p.m. New York time

In my managed shares portfolio, CANE produced a sell signal on the directional movement index, and I replaced it with EWL, which tracks Swiss stocks.

Two of my short iron condor holdings go ex-dividend on Friday. XLY is out-of-the-money for both short calls and puts and so is unlikely to be assigned. XOP is out-of-the-money by only 7 cents as of this writing and will bear close watching up to the closing bell. I judge XOP to have a greater risk of assignment that XLY, but not a huge risk.

Rather that go through a full write-up on my experimental earnings plays, as I did with FDX, I’ve pulled together a spreadsheet that I’ll use to track hypothetical earnings plays on all of the stocks that meet my liquidity standards. The spreadsheet is on Google Sheets and can be accessed here.

By Tim Bovee, Portland, Oregon, September 19, 2019

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