May RUT Iron Condor

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 2011 RUT Open

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.