Deathlok April RUT Close

Ended this month the same way as Mantis. Closed out my lower wing (670/680) in case I needed to move my upper wing, sat on the upper wing and let it settle on Friday. Final numbers for this month:

Daily P/L:  4.55%
Month to Date:  41.25%
Year to Date:  13.89%

Of course the money hasn’t posted to my account yet, so I haven’t opened my May IC yet. Hopefully on Monday.

MAY 2010 RUT Iron Condor

For my April RUT Iron Condor spread (630/640 – 730/740), everything was running like a well oiled machine until the final week when the RUT decided to go on a bull run.  The RUT closed at 723.57 on Thursday. It became too late to close the upper wing, so I decided to cross fingers hoping that the RLS wouldn’t open above 731.5 which is breakeven for this month.  The RLS settled at 723.56 so the options expire worthless, and we experience max profit… well almost max profit, I did buy back my 640 puts for a nickel so I could adjust the 730 wing if it became absolutely necessary.

Now on to May’s Iron Condor.  The RUT was trading around 724 when I opened the trade on 4/15/2010.

Buy 660 Puts @ 3.22
Sell 670 Puts @ 4.11
Sell 770 Calls @ 2.24
Buy 780 Calls @ 1.33

  • Net Credit: $1.80 per share or $180 per contract (each contract is 100 shares)
  • $1000 margin requirement per contract
  • $180 / $1000 = 18% return on investment
  • Total potential loss of $820 ($1000-$180) per contract

May’s initial credit spread has a 75% probability of success based on a probability calculator provided by my broker.  Upon settlement of April’s worthless contracts, I may open a new position in a week for a smaller profit, but higher probability of success.