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  • Tag Archives iron condor

  • 5 Oct 2011 #2

    Posted on October 5, 2011 by Administrator

    I’m a market timer in many ways, I focus on historical patterns and seasonal patterns, etc. It just doesn’t jive to think the market has bottomed yet. Of course always expect the unexpected.

    The strength of institutional buying in the last half hour yesterday caught me completely by surprise and seems a bit of a fly in the ointment of my market timing. There seems to be decent follow through today, although today is not finished. This has me already uncomfortable with the iron condor position I sold; I thought I was selling into a dead cat bounce, but this cat doesn’t seem too dead.

    Time is on my side with this iron condor; 15 days to go, 4 of them weekends, 1 of them almost finished.

    This entry was posted in iron condor and tagged . Bookmark the permalink.

  • 5 Oct 2011

    Posted on October 5, 2011 by Administrator

    1. Bought Oct iron condor on the RUT 730/740/510/500 @.9. Time risk 15 days. This is a short term iron condor. I anticipate a 2-3 day rise and then another drop, probably the final low of Oct. I will cash the iron condor out when it hits a profitable sweet spot in a few days, probably Monday. Just making a couple hundred bucks, no big trade going on here.

    2. Is it just me or now that Ameritrade has taken over thinkorswim, I seem to be paying a hell of a lot more in commissions. I think I may need to switch to Interactive Brokers like I’ve been meaning to do for several years. Problem is I don’t really care to devote 3 weeks to learning their software.

    3. I would anticipate Oct lows will be the 2010 lows, which for the RUT would be Apr2010@600 or perhaps Oct2009@550. Note the RUT has already kissed the 2010 lows.

    4. The DAX broke support, EWG is back on my shopping list for when we hit Oct lows. One reason for the DAX relative weakness is a strong dollar.

    5. I anticipate lows around Oct 12 but this could stretch all the way into Nov. Will need to see capitulation for confirmation.

    6. Materials such as AA are relatively weak because of the strong dollar.

    7. Gold has switched correlations, it now appears to be an anti-euro. Gold and dollar now appear to be forming a positive correlation.

    8. RUT relative strength versus the SPX has been falling.

    9. High volume in the last 20 minutes of trading on the 4th suggests institutional buying. Why? They actually think we hit low?

    This entry was posted in iron condor, RUT and tagged , . Bookmark the permalink.

  • Gold iron condors

    Posted on September 27, 2011 by Administrator

    Considering putting iron condors for Oct onto GLD.

    1. Gold volatility is extremely high so premiums are good.

    2. Time risk: 24 days

    3. All metals have dropped sharply on the fears of dropoff in industrial demand, eg recession in Europe.

    4. Dollar and gold have a generally inverse relation, and euro and dollar have a generally inverse relation.

    5. Range in the past 3 wks: 1920-1534. Behaving like a risky asset.

    6. Reasons for selloff? Disappointment with no QE in Fed announcement last week? CME raising margins again? Selling gold to cover margin calls? Or is this simply the correction everybody with a brain knew was coming but had given up trying to guess when? And has corrected 25% thus far.

    7. On Monday some traders seemed to be trying to pick a bottom, rallying 5% to 1612.

    8. 200 MA is 1525.

    9. Real rates are still negative, I believe (need to check that) which is bullish for gold.

    10. Gold has dropped at the peak of financial crises, notably 2008 (30% drop) and Dubai crisis 2009 (12% drop), only to rally again. Gold is reacting to Eurozone crisis? and so has dropped 25% Price will probably stabilize soon?

    11. Most traders will probably stay on the sidelines at the moment, which again suggest price stabilization, which is good for iron condors.

    12. Looking at Oct 180/190/130/140 @ 1.22. Nice profit there.

    13. Pterodactyl for gold crash: 180/190/150/149 @ .79. Decent profit and downside risk is limited to $210. Notice this is right below the 200 EMA.

    14. Safer pterodactyl: 180/190/140/139 @ .61 with downside risk of $390.

    15. Delta: 140=.11 130=.06 180=.12 185=.07

    16. Delta safe trade foll0wing my trade rules would be 180/190/130/120 @ .8

    17. Gold seems dangerous right now, which is precisely why premiums are good, but also why I need to think about this carefully.

    This entry was posted in GLD, gold, iron condor and tagged , , . Bookmark the permalink.


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  • Philosophy

    Our basic theory of investing is that markets are chaotic, in that prices are not necessarily an efficient reflection of value; rather, prices of assets depend largely on the emotional reactions of traders who buy and sell them.

    We generally trade options to minimize capital risked. Our primary aim is to preserve our capital. We trade with a 1-3 month window generally; we focus on the macro picture and are not interested in hourly movements or short term trades.

    Opportunities can be found by carefully studying value; by this we mean both undervalued (buy calls) or overvalued (buy puts).

    Psychology is predictable and pattern-based. People are very slow to change. Thus in the markets, history often repeats itself, and the market can be predicted by carefully studying past performance, including correlating the performance of other asset classes or other markets; this is the repetitive geometry of markets. Patterns tend to replicate across or between assets, asset classes, and time frames.

    If everybody on Wall Street is saying something, it's probably wrong. We are contrarians.

    We generally advocate heavily concentrated positions in which we are extremely confident, rather than wide diversification.

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