After being a complete idiot and not following the trading rules by spending EMERGENCY cash on naked options.  Here is the bottom line for August close.

1. Bought out the August 910/920 Bear Call Credit Spread for .05 per contract
2. Rolled the August 720/730 Bull Put Credit spread to a September 740/750 Bull Put Credit spread for .50 per contract
3. Rolled the August 735/745 Bull Put Credit spread to a September 740/750 Bull Put Credit spread for 2.00 per contract

Current position is a September 740/750 Bull Put Credit Spread.  It may take a few months to recover, but at least we didn’t lose it all.

See you next month.

Here is a view of the RLS settlement value for the last 3.5 years.  The key takeaway here is the RLS settlement value changed more than 60 points between options expiry 6 times.   5 of which occurred in 2008 (Jan, Aug, Oct, Nov, Dec).

Based on this, TNAPS’ strategy is to sell 150-170 point spreads for a decent chance at booking profit with a target of 5-8%.  You won’t hit any home runs with this method, but hopefully you’ll pick up some steady income.  But one replay of 2008 and you’re toast. ^_^

The June Bull Put 735/740 and Bear Call 885/890 Russell 2000 Iron Condor expires worthless and we experience max profit.

July Spread

Buy 700 Puts @ 2.55
Sell 710 Puts @ 3.25
Sell 860 Calls @ .52
Buy 870 Calls @ .32

• Net Credit: $.90 per share or $90 per contract (each contract is 100 shares)
• $1000 margin requirement per contract
• $90 / $1000 = 9% return on investment
• Total potential loss of $910 ($1000-$90) per contract

The May Bull Put 735/745 and Bear Call 905/915 Russell 2000 Iron Condor expires worthless and we experience max profit.

June Spread

• Buy 730 Puts @ 2.41
• Sell 740 Puts @ 2.67
• Sell 885 Calls @ .49
• Buy 890 Calls @ .40

* Net Credit: $.35 per share or $35 per contract (each contract is 100 shares)
* $500 margin requirement per contract
* $35 / $500 = 7% return on investment
* Total potential loss of $430 ($500-$70) per contract

This month we have a 735/745 – Bull Put Credit spread and a 905/915 Bear Call Credit spread.  Total point spread is 160 points.

Potential ROI is 10%.  Essentially 1.00 for every contract sold.

April RUT Iron Condor spread opened on 3/22 was a 730/740 – 870/880. RUT was trading around 808 (130 point spread).

April RUT Spread

• Buy 730 Puts @ 2.72
• Sell 740 Puts @ 3.42
• Sell 870 Calls @ .70
• Buy 880 Calls @ .37

* Net Credit: $1.03 per share or $103 per contract (each contract is 100 shares)
* $1000 margin requirement per contract
* $103 / $1000 = 10.3% return on investment
* Total potential loss of $897 ($1000-$103) per contract

Exit Lower Leg – 730/740 – 3/31/2011

I was able to exit the lower leg of the Iron condor for .35 cents per contract. The new Options house platform behaved differently than I expected and I placed the order a little too quickly. Ohh well, profit of .35 per contract booked and we move on.

March RUT Iron Condor spread opened on 2/22 was a 730/740 – 870/880. RUT was trading around 808 (130 point spread). A little bit larger spread after getting royally burned last month.

First March RUT Spread

• Buy 730 Puts @ 3.99
• Sell 740 Puts @ 4.91
• Sell 870 Calls @ 1.27
• Buy 880 Calls @ .79

* Net Credit: $1.40 per share or $140 per contract (each contract is 100 shares)
* $1000 margin requirement per contract
* $140 / $1000 = 14% return on investment
* Total potential loss of $860 ($1000-$140) per contract

I also opened a second 730/740 – 875/885 March RUT spread. RUT was trading around 808 for the lower put leg, and 825 for the upper call leg (135 point spread).

Second March RUT Spread

• Buy 730 Puts @ 2.70
• Sell 740 Puts @ 3.44
• Sell 875 Calls @ .90
• Buy 885 Calls @ .45

* Net Credit: $1.19 per share or $119 per contract (each contract is 100 shares)
* $1000 margin requirement per contract
* $119 / $1000 = 11.9% return on investment
* Total potential loss of $881 ($1000-$119) per contract

Visit The options guide for details on Iron Condors and other option trading strategies.