11:10 a.m. New York time

XOP remains below its profit zone, and at the present rate of change would take one trading to return to profitability. My trading rules presently require an exit if the return time exceeds two days. That’s a tentative time, and I may well decide to lower it, depending upon the outcome of this trade.

The other metric require an exit if more than half of the one standard deviation range lies beyond the profit zone on the tested side. Both 1SD boundaries for XOP this morning are within the profit range — by 6% on the lower side, which is being tested, and by not-even-close on the upper side. The lower side 1SD boundary gives me reason to wait before exiting, although the two metrics aren’t linked in my current rule set.

I adopted the new rules in March, and I’ve added them as a “Trading Rules” item on the menu at the top of the Private Trader site.

The target exit date for XOP and my other holdings expiring in June is May 31, this coming Friday.

By Tim Bovee, Portland, Oregon, May 28, 2019

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iShares Russell 2000 ETF (IWM)

Update 6/25/2019: IWM reached 50% of maximum potential profit and I exited the short iron condor position. During the month (plus change) holding period, IWM traced a wave to the upside and then began a decline. The implied volatility rank (IVR) decline by 4.4 to 23.5%.

The position produced a profit of $0.31 per share as the share price showed a net rose from entry of $0.91, although while I held the position it covered a bit more real-estate, peaking at $152.08, or $1.18 above the price at entry. In other words, it was a perfectly well behaved iron condor, of the sort I love to see.

Shares rose by 0.6% over 32 days, or a +7% annual rate. The options position produced a 100.0% return for a +1,141% annual rate.

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I have entered a short iron condor spread on IWM, using options that trade for the last time 56 days hence, on July 19. The premium is a $0.62 credit and the stock at the time of entry was priced at $150.90.

The profit zone for this position is between $159.62 on the upside and $138.62 on the downside.

The implied volatility rank (IVR) stands at 28.

Premium:	$0.62	Expire OTM
IWM-iron condor	Strike	Odds	Delta
Long	161.00	87.0%	13
Break-even	159.62	84.0%	16
Short	159.00	81.0%	19
Puts
Short	140.00	80.0%	19
Break-even	138.62	82.0%	17
Long	138.00	84.0%	15

The premium is 31.0% of the width of the position’s wings.

The risk/reward ratio is 2.2:1.

By Tim Bovee, Portland, Oregon, May 24, 2019

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4 p.m. New York time

I’ve posted the full IWM analysis.

3:40 p.m. New York time

IWM entry order filled at $0.62. Full analysis to follow.

3 p.m. New York time

I’ve placed an order for a short iron condor on IWM, expiring July 19, which has an IV rank of 29. The short wings are $159 on the call and $140 on the put, with the long wings $2 out on the strike price. I’m asking $0.62 and have not gotten a fill.

1:35 p.m. New York time

I’ve posted full results on IYR.

11:10 a.m. New York time

My order to exit my iron condor on IYR has finally been filled, at $0.19 with shares at $88.14. Full results to follow.

XOP remains below the profit zone, but not far enough to trigger an exit. My trading rules require an exit if the price is far enough out of the profit zone to require two days or more to return to profitability, using the present 14-day average rate of change of the price to calculate the time distance. By that method, XOP would take 0.73 session-days to return to the profit zone.

By Tim Bovee, Portland, Oregon, May 24, 2019

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3:35 p.m. New York time

XOP has moved below the profit zone, signaling that under my rules, I might take the loss. A tentative addition to my trading rules, as modified, says:

“If more than half of the 1SD range is beyond the profit zone in the tested direction, then exit the position. If the price moves below the profit range and the number of days required for the price to return to the profit zone, as measured by the 14-day Rate of Change, is greater than two days, then exit the position.”

At present, XOP’s one standard deviation mark is 7.1% below the profit range, and the time taken to return is 0.65 days, or about two-thirds of a trading session. So, as to an exit, not today. But XOP will need close watching. The current price of XOP shares is around $27.08, and the lower boundary of the profit zone is at $27.47.

10:10 a.m. New York time

As I did the first three days of the week, today I have once again entered an exit order for my short iron condor IYR, for $0.19, with the bid/ask midpoint at $0.18. I shall keep doing that as long as the midpoint is at 40% of maximum potential profit or higher.

My positions are due for an exit or management eight days from now, which will be 21 days before expiration on June 21.

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

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11:50 a.m. New York time

I’ve entered an exit order, yet again, on my short IYR iron condor, with a bid of $0.19. The present bid/ask midpoint in $0.20.

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

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Apple Inc. (AAPL)

Update 6/4/2019: My short iron condor on AAPL returned, barely, to profitability, with 17 day remaining until the options expired. Under my rules, I continue to hold unprofitable positions after the 21-day mark. Afterward, rather than waiting for profit reaching the 50% of its potential maximum, I exit at any sign of a profit.

In AAPL’s case, the profit was $0.02, with an exit debit of $1.16. That price was 2.5% of maximum potential profit. This won’t be enough to cover trading fees. But that’s my problem, not the market’s. I count this as a win for my new “sudden death” strategy for exits.

AAPL fell four days into the trade and continued to fall until the exit day, when it joined the market as a whole in a sharp rise. The stock price fell $10.46 during my holding period. The implied volatility rank rose 5.1 points to 44.4% at exit, providing no help in producing a profit. (With short options positions, declining implied volatility contributes to profitability.)

The shares decline was 5.5% over 18 days, or a -112% annual rate. The options position produced a 1.7% return for a +35% annual rate.

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I have entered a short iron condor spread on AAPL, using options that trade for the last time 35 days hence, on June 21. The premium is a $1.19 credit and the stock at the time of entry was priced at $189.98.

The profit zone for this position is between $206.18 on the upside and $171.18 on the downside.

The implied volatility rank (IVR) stands at 39.

Premium:	$1.18	Expire OTM
AAPL-iron condor	Strike	Odds	Delta
Long	210.00	75.5%	27
Break-even	206.18	80.1%	22
Short	205.00	84.7%	17
Puts
Short	175.00	80.1%	17
Break-even	171.18	83.2%	14.5
Long	170.00	86.3%	12

The premium is 23.6% of the width of the position’s wings.

The risk/reward ratio is 3.2:1.

By Tim Bovee, Portland, Oregon, May 17, 2019

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4:25 p.m. New York time

And the day ends without a fill on my exit order on the IYR iron condor. The closing bid/ask midpoint was $0.18.

1:20 p.m. New York time

I’ve entered a short iron condor position on AAPL.

10:15 a.m. New York time

I’ve re-established my exit order on IYR for a debit of $0.19. The bid/ask midpoint is now running at $0.14. My remaining positions —  UNH, XBI, XLB and XOP — remain within the call and put short strikes. All five positions are short iron condors with very wide short strikes. In building them I aimed at delta 20 or smaller for each short leg, which produces a profit zone covering around a one standard deviation or more.

By Tim Bovee, Portland, Oregon, May 17, 2019

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1:40 p.m. New York time

I’ve updated my CGC entry analysis with results.

1 p.m. New York time

My exit order on CGC has been filled for a $0.49 debit, with shares trading at 45.29. Full results to follow.

9:50 a.m. New York time

I’ve re-entered exit orders on my short iron condors on CGC and IYR, both of which are approaching 50% of maximum potential profit, which is a signal to exit the positions under my rules.

CGC is trading at $0.51, and my ask price is $0.49. IYR is trading at $0.20 and my exit price is $0.19.

My other positions, also short iron condors, remain in the profit zone but have yet to approach the 50% of max mark. They are UNH, XBI, XLB and XOP.

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

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3:25 p.m. New York time

I have two exit orders today for short iron condor positions nearing 50% of maximum potential profit, the exit point under my trading rules.

I’m asking $0.49 for the CGC options position, which is now trading at $0.52, and $0.19 for IYR, which is trading $0.22.

I’ll post an update if either order is filled; otherwise, I shall let them quietly expire.

By Tim Bovee, Portland, Oregon, May 15, 2019

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3:20 p.m. New York time

IYR retreated from its low point without my order being filled. The position is now trading at a $0.26 debit. I’ll keep the order alive until the close and update this post in the unlikely event that it’s filled.

10 a.m. New York time

My short iron condor position on IYR  has moved near the management point, which under my trading rules is 50% of maximum potential profit. I’ve put in an exit order for a $0.19 debit, with the bid/ask midpoint running at $0.21.

My other holdings, also short iron condors, remain within their profit zones. The are  CGC, UNH, XBI, XLB and XOP. All of my positions are scheduled for exits by May 31.

By Tim Bovee, Portland, Oregon, May 14, 2019

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