Condor Options

While our portfolio hasn’t changed all that much since the last time we added up our net position at each strike, we have some closing orders to place before expiration, and this would be a good time to make sure account positions are in line. For each base-position unit traded, we currently have the following open positions:

+2 SPY Nov 111 puts
+3 SPY Nov 113 puts
–3 SPY Nov 117 puts
–3 SPY Nov 119 puts
–1 SPY Nov 125 put
–2 SPY Nov 132 calls
–3 SPY Nov 133 calls
+1 SPY Nov 134 call
+1 SPY Nov 135 call
+1 SPY Nov 138 call

+2 SPY Dec 119 puts
+2 SPY Dec 137 calls

The history of how we got here and statement of which positions belong with which trades can be found on the Portfolio page—but looking ahead to how we can unwind this month’s portfolio most efficiently, I’m going to propose a slightly different breakdown. Here are the trades we’ll probably use to flatten out what we need to before expiration:

+1 SPY Nov/Dec 119/125/133/137 Double-Diagonal
+1 SPY Nov/Dec 119/119/133/137 Double-Diagonal

Selling the two double-diagonals above would leave us short three iron condors, plus two put vertical spreads, as follows:

–1 SPY Nov 111/117/132/138 Iron Condor
–1 SPY Nov 111/117/132/134 Unbalanced Iron Condor
–1 SPY Nov 113/119/133/135 Unbalanced Iron Condor

–1 SPY Nov 113/117 Put Vertical Spread
–1 SPY Nov 113/119 Put Vertical Spread

Despite what I wrote above about having to unwind the double-diagonals before expiration, conditions might make it more advantageous to take off one or more of the condors or verticals prior to selling the DD positions. For example, if the S&P rockets higher, we could find ourselves closing any of the above call spreads (November vertical or Nov/Dec diagonal) to limit risk and maximize potential profit (or minimize loss, as the case may be) at expiration.

Whatever had the market deals us over the remainder of the week, I’ll send out a trade notice when the time comes, including what the planned trade(s) is (are).