SPY Iron Condor Profitable & New IWM Iron Condor, Rolled Calls Of Weekly SPY Iron Condor

As detailed in yesterday's post SPY Quarterly Iron Condor & Weekly Iron Condor Look Great Heading Into Expiration, New Monthly IWM Bull Put Spread Opened, we looked good going into today's expiration. The market exploded higher overnight on the latest Eurozone headline gapping higher at the open bell. The strength continued throughout the day but the bulk of the gains were made overnight, as has become so common this year.

 

Ultimately, despite the major rally, our Monthly Trading Service Iron Condor expired worthless for full profits of +12.99% in 21 days.

 

The performance for the entire Monthly Trading Service portfolio has been +13.04% since May OpEx. After a rough start to the year, the Monthly Trading Service is performing well as a result of the strategy tweaks we implemented in response to the trading action. The Service currently has a July IWM Iron Condor & a July SPY Bull Put Credit Spread open with more positions slated for deployment during the upcoming Holiday trading week.

 

The Weekly Trading Service's Iron Condor got into trouble today with the extreme market gap up requiring us to take action with the call spread side of the position. We successfully rolled the call spread side of the Iron Condor to next week's weekly options for a minor debit, thereby reducing our overall credit (profit potential) by about 20%.

 

The roll adjustment to the Weekly Iron Condor utilized the same strikes and was timely as the SPY rallied right into the close. The strikes were simply rolled out to next week's weekly Opex. With such an explosive market gap up, blowing past most Moving Averages and moving far from the short term 5, 10, and 13 Day MA's (meaning very overbought), our adjustment simply buys us time for the market to digest such a move.

 

The fact that SPY rallied all day right into the close tacking on +2.5% is actually encouraging. If the SPY had given back some of the gains into the close it would mean the rally was being tested and digested. But a parabolic move is just that, parabolic, making the rally less strong and traders less confident in it. Friday's action was very indicative of a quarter end short squeeze. Heading into the Holiday week, volumes will dry up and trading will be volatile.

 

The gap-up-and-run today may not be back-and-filled early next week due to the Holiday but it will be soon enough. This may require us to roll the Weekly SPY trade again which is fine with us. SPY 136 (S&P 1360) is a heavy area of resistance and some chop around this area should be expected; especially after such a large move in just one day. Next week, if any strength continues, we plan to initiate some SPY debit put spreads for the Weekly Service to take advantage of the market volatility and today's stretched rally.

 

Bottom line, we will continue to ride the lightening on days like today and manage our trades appropriately booking profits and making adjustments when prudent. Not panicking on days like today is critical. The strategy tweaks to both Services have been appropriate and successful and we look forward to a great rest of the year.

 

Thanks to you all and have a great weekend!!!