This trade was shown for educational purposes only.
We showed an example of a March IWM 74/76/70/69 Iron Condor were we received a credit of $1.00. The idea was that since our top strikes were 2 dollars wide and our bottoms were only one dollar wide we had no downside risk.
The real magic of this trade is exemplified on a big down day like today where the bottom strikes get completely run though. With just over 10 days left before expiration, we can pull the trade off and still make a small profit.
To buy back the bottoms at todays close would have cost .78
To buy back the tops at todays close would have cost .03
Total cost to buy back is .82 ($82) + $12 in commissions.
Received $100 credit less $84 to buy back plus all commissions. $6 profit.
To pull off the entire trade you would still make 6% after commissions.
The Original Chart:
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1 comment:
I'm not able to listen to the conference call. I was only able to hear about 1min worth of audio and then it was done
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