February 2011 RUT Open & January 2011 RUT Close

We experienced max profit for the January RUT Iron Condor (710-720/830-840) with the RLS settling around 783 on expiration Friday. There was no need to buy out the spread as risk was minimal.

The first leg of the February RUT Iron Condor spread opened on 1/25 was a 710/720. RUT was trading around 773.

January RUT

  • Buy 710 Puts @ 3.72
  • Sell 720 Puts @ 4.67
  • Sell 830 Calls @ 1.24
  • Buy 840 Calls @ .64

Net Credit: $1.55 per share or $155 per contract (each contract is 100 shares)

  • $1000 margin requirement per contract
  • $155 / $1000 = 15.5% return on investment
  • Total potential loss of $845 ($1000-$155) per contract