Tryumph Trader

Online Trading Journal

OPEN: IWM IC

OPEN IWM IRON CONDOR

We have some good support and resistance levels, Check out the 2 yr Trend

2 yr Trend

Support @ 67.50 – 65
Resistance @ 72.50 – 75

Trend Neutral to bearish.

  • BTO MAR08Q 75 Calls
  • STO MAR08Q 73 Calls
  • BTO MAR08Q 63 Puts
  • STO MAR08Q 65 Puts

Credit 1.00

BPE = 1.00 (risk)

BE$ = 64 / 74

RR: 1:1

Max gain 1.00

Max Loss 1.00

Risk: 2.00

80% probability of success.

I will add a broken butterfly to the top around 185 on weakness

I will add a broken butterfly to the bottom around 175 on strength.

Close at 80% profit

Close 7-14 days before expiration if profitable.

February 19, 2008 - Posted by tryumph | Uncategorized | , | 3 Comments

3 Comments »

  1. Tryumph,

    Cool blog. Could you say a little more about what you mean by “add a broken butterfly to the top/bottom…”? I’m pretty familiar with iron condors and I like them a lot, but I haven’t heard of this butterly-adding idea before, and I’m not sure if I understand.

    Cheers,
    Eric

    Comment by ericthomas70 | February 28, 2008

  2. Eric,
    Thanks! Great question.
    First it depends how you trade Iron Condors. If your style is similar to the one outlined above this will make more sense. Second I use ThinkorSwim Brokerage if you are using a different brokerage so the rules for your account may be different.
    Third I don’t know what your trading experience level is or your success rate is with IC’s.

    That said, I would add broken Butterflies to the edges of the condors if I felt like one of the wings would be in danger prior to expiration. You use this strategy to
    * reduce your risk,
    * bring in more premium
    * expand your break even with out adding too much additional to your margin.

    Call this an Owl trade because the risk graph using Think or Swim’s analyze tab (@ expiration +1) looks like an Owl.

    Simply I Buy a Butterfly and then “break” the wings using one of the short sides of the Condor as the “synthetic” position. Way confusing to explain – much easier to see.

    I will create a new post with more details on this strategy since a picture is worth…. I’m in an Investools workshop today so expect the post by Monday.

    Comment by tryumph | February 28, 2008

  3. Thanks, looking forward to the details!

    Comment by ericthomas70 | February 28, 2008


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