Opening (IRA): SMH July 19th 189/199/255/265 Iron Condor
... for a 2.23 credit.
Comments: A small engagement trade in the semiconductor ETF (31.5% 30-Day IV).
Going somewhat wide here with the deltas, with the short option legs camped out at 16 delta on both sides. I generally like to collect one-third the width of the wings in credit for these, but am going a little more long-dated than usual, so want to give it a smidge more room to be wrong.
The assumption here is neutral, with the bet being that it slops around between my short option strikes. I'll generally look to take profit at 50% max and/or adjust sides on approaching worthless or on side test.
Metrics:
Buying Power Effect: 7.77
Max Profit: 2.23
ROC at Max: 28.70%
ROC at 50% Max: 14.35%
Delta/Theta: .37/3.01
Comments: A small engagement trade in the semiconductor ETF (31.5% 30-Day IV).
Going somewhat wide here with the deltas, with the short option legs camped out at 16 delta on both sides. I generally like to collect one-third the width of the wings in credit for these, but am going a little more long-dated than usual, so want to give it a smidge more room to be wrong.
The assumption here is neutral, with the bet being that it slops around between my short option strikes. I'll generally look to take profit at 50% max and/or adjust sides on approaching worthless or on side test.
Metrics:
Buying Power Effect: 7.77
Max Profit: 2.23
ROC at Max: 28.70%
ROC at 50% Max: 14.35%
Delta/Theta: .37/3.01
