Wednesday, December 23, 2009

Re: [TheOptionClub.com] Another Condor Adjustment Question

 

Since I own IWM, I can tell you that this resistance point has been hit so often and not broken much past this area without even looking at a chart. At around 80 many people want to dump the stock. So patience may pay off without adjusting. Please look at the strong resistance at this current level.

Becky McClain

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From: "mattioli0315" <tmattioli@sc.rr.com>
Date: Wed, 23 Dec 2009 16:15:50 -0000
To: <OptionClub@yahoogroups.com>
Subject: [TheOptionClub.com] Another Condor Adjustment Question

 

Let me start by thanking all of you who give advice and knowledge so freely. This group has been very helpful in my ongoing education.

I am paper trading Iron Condors in my TOS account and have a very basic (some would say dumb) question to ask. I have a position in IWM that needs adjusting due to the IWM bullish movement over the past couple weeks. The position is an IC with Jan 57/58 Puts and 63/64 Calls. The Delta is around 108 and theta is a bit over $5. I could adjust the position by purchasing a butterfly and move the calls out a bit or I could sell another IC with 63/64 Puts and 68/69 Calls that would reduce my delta to less than 15 but would also reduce my theta to under $4. My question is how best to determine the pros and cons of these two adjustment trades and determine the better action. What other things should I consider when making this type of adjustment? Thanks in advance for helping with this very basic question.

Tony

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