Yesterday, we had another weak profit report by a home builder, Lennar (LEN), a sharply lower consumer confidence reading, and troubling oil prices. The S&P 500 and Dow industrials shed 0.6% each. The small-cap S&P 600 gave up 0.7%. This selling was on lighter volume, however.
The half-point drop in the S&P 500 was certainly a welcome event for my 1,460 - 1,470 bear call spread. During this consolidation I managed to open a 1,365 - 1,355 bull put spread, rolling into an iron condor for an additional 60 cents credit. That boosts the total credit to $1.80, providing now for a maximum return of $1.80 / ($10 - $1.80) = 21.9%.
The market has opened to the downside this morning. My position delta on the newly formed iron condor is negative, so some additional selling is not of great concern.
Mind your risk!
Christopher Smith
TheOptionClub.com
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Wednesday, March 28, 2007
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1 comment:
have you tried the RUT for condors? today I found out that options are trading in penny increments, and my fills were amazing. Also, the spx and rut are so correlated that it may be a good substitute.
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