Market Overview

SPY Iron Condor, GOOG & AAPL Update, & SPY Wedge Forming

Share:

Today's SPY Iron Condor was an opportunity trade. An opportunity to potentially scalp a nice profit off the SPY became available this afternoon with today's tight market trading range. This morning's volatility juiced this week's options and we jumped on the opportunity.

Theta (time decay) took its toll on the position in the final 30 minutes of trading eroding the value of the calls by almost 50%. This benefits us as spread sellers in a big way as the spread value is now worth much less if we elected to close the position by buying back the calls to close. The difference between what we sold the calls for and what it would cost to buy them back is our profit.

This trade is anticipated to only last about 48 hours, expiring this coming Friday. Very defined support and resistance is evident in the market and the cross currents of positive economic data, geopolitical unrest, and rising commodities should be enough to continue the markets containment through the end of the week.

One item to note is the wedge pattern forming in the SPY. The wedge that is forming is coming to a very defined point and typically this chart pattern resolves with a large move one way or the other. It is too early for us to predict which way (up or down) the market will resolve this trading action. However, we are inclined to lean to an upside resolution.

The put side of our GOOG Iron Condor is requiring a lot of controlled breathing right now but the stock is reacting very well to support in the $590 area. The stock has been walking down the Bollinger Band and is very oversold short term. A bounce to relieve the oversold state is expected and if it occurs this week, no adjustment will be required. Rest assured, we are all over it and watching very closely. Thursday will be an important day.

Our adjusted AAPL call spread from last week is reacting well to the stock's weakness and is setting up nicely going into Friday expiration. Stay tuned and happy trading!

Check out my latest interviews at TraderInterviews.com & Benzinga:

Trading has been active lately and the feedback has been great! Add your review today at Investimonials.

BookingAlpha clients are enjoying 86% winners and a portfolio return of over 12% for 2011 already , are you?

Subscribe today and don't miss out on your next profit opportunity!

TradeMonster- Get $50.00 FREE for opening a new account.
Enter promo code: BookingAlpha during account opening process for your FREE $50 bucks!

Posted-In: credit spread iron condor options tradingNews Options Trading Ideas Press Releases

 

Related Articles (AAPL + GOOG)

View Comments and Join the Discussion!
Fastest Market News Application
You'll Hear It First On Pro
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Forex - AUD/USD down during Asian trade

Fill Report: SPY Iron Condor