A Tasty Standard - 45 DTE SPX Iron Condors

The above is a great video which shows the efficiencies of trading SPY or XSP $5 or $10 wide wings on a 20 delta IC. $5 wings costs you $500 in margin, compared to $5,000 per contract @ SPX. SPX and XSP are the same thing, just SPX 10x the size of XSP.

example @48 dte, pretty close to 20delta and $5 wide. $5 as low as you can go with XSP. an advantage of trading smaller contracts, besides lower margin, is you can scale in/out larger numbers

trade above just a quick example. but as shown, trade risks $5k to make (50% of $1,230 =) $615, or about a 12% ROC, typically trade will come off in 30 days or less, so that's 144% return per annum. It can be done.

$5 or $10 wings in SPY is $50 or $100 wings in SPX. I have never gone above $50 wings, but I might

https://www.forexfactory.com/attachm...1?d=1705940358
one week in on this ic, now 33dte; SPX is 40-50 pts higher, both verts are a ways otm. Overall, the ic is 50c underwater. Net theta on the calls is -$0.15 per day; on the puts, just -$0.03/day. Watching paint dry. If you want no drama trading, put these on @ 45dte in a low vol sideways market. Should be noted theta loss is more the wider the wings. But, you pay for that, of course.

what do you do if it pass the upper break point

GOOD question. One thing most people agree on is, if price is moving against the calls, then you roll up the put spread for additional credit.

What you can do to the call side (in a hard move against the calls) is variable. It kind of depends on how you feel about the original premise of the trade.

In the SPX IC above, I have been caught in my assumption that the upmove in SPX would play out and SPX pa would level out. The indices have been seen to do this frequently - put on step-wise upmoves - big move over a few days, followed by weeks of relatively sideways action. However, it looks like the market is primed to keep melting up. I will wait til this heavy fundi week is done by Thurs/Fri to see what I may do. I could roll the calls up and out a couple weeks, do the same to the puts, and reduce my loss. (When I say loss I mean loss against the original $8 credit of the trade.)

Or, I could take the loss sooner than later if it seems I will be fighting a runaway bull market. Continuously rolling in a melt-up can drag out for weeks, is exhausting. The call spreads are a lot richer than the put spreads, so rolling up & out multiple times will inevitably erode the credit down towards $0.

The best time to trade IC's is when you expect the market to not move much - I knew it was a gamble putting this one on thru an FOMC and earnings, something I will remember better next time if I suffer thru this one.

I've put on some Feb2/Feb5 XSP call calendars that will pay if SPX spikes up this week, that will help cover the cost of rolling.

I need a GOOGL big miss ah today to weigh on the indices.

WITH a little drop after hours now the Mar01 $8 IC is showing a ~$6.50 buy-back. If we get more red overnight and I can squeeze $2 out of it, I probably will instead of holding thru the (probably dovish) Fed....either that or I'll buy back the calls and roll up the puts, we'll see...

...that was wrong...the IC is sitting at near be. I am antsy about the binary week shaping up & may take the whole thing off at no loss, to re-deploy next week after the dust has settled.

I bot back the call verts, left the put verts in place. calls came off for 30c debit or 50c credit. Things will be clearer to me by next week. Obviously I am looking for a dovish fed and this earnings dip as just another btfd. If I'm wrong, won't be the first time lol, if right and we rally, I will recenter another IC for Mar opex...

wild card I am looking for also is US retaliation for Jordan attack, will be soon, could be a mofo...

so how many trades you need to make for a condor set up?

iron condor is 4 separate positions - short a call and long a further call (a call vertical) and short a put, long a further put (put vertical)

damn, wrong again....JPow hems and haws & market craps pants. No regrets though, probably a btfd gift, we'll see. Will wait for the rebound to re-establish another IC...

Waiting for the remaining mega ERs and NFP. I still think risk is to the upside.

SPX IC @42dte, 21 delta, 25 wide, $7.60 credit....meh...vol is crashing out there and these IC's are not paying well....typically @25 wide I'd like to get at least $8-9....

will take this 30dte if I can get it. I think we are due for some sideways action in the next few weeks, barring any downside catalysts...

...the $8 IC above paid a little over $1.00, glad to recenter it. Below trade is 20 delta calls, 11 delta puts

the 5100/5125 bear calls above went on for $4.25, another good down day & they will come off for >50% credit

one-way market not what I need for IC's, but it can't last forever. Thinking of rolling the IC above out to Mar 15, probably wait a few more days. If I roll up thee puts to about 15 delta and roll up the calls to about 20 delta, I can roll for a $1 credit gain....

...with 15dte to Mar01, I think I will keep the Mar01 expiry and roll the IC above to what's shown. Original IC is about $1.25 underwater, new IC shown should net a little less than $5.00 today....

KEEPING Mar01 exp, keeping calls as-is, rolling puts up to about 15 delta, for a net credit gain of $1.75 - gets the original $5.65 to $7.40 max profit