On what felt like a higher spike in Volatility we entered this order
$5 wide SPX condor with about 32 days left, We are expecting a decrease in Vol, as well as time Theta Decay. We received $2.00 Credit against $5.00 max risk, stand alone approx. 60 percent chance of making money here according to the odds.
The Risk Graph looks like this. (was more centered at time of entry)
The Market has moved higher, but as that is happening our view to bias SHORT is increasing.
We looked to adjust.
We were paid $2.00 to enter or $200.00 X 15 times $3000.00
We are spending $1.80 x 15 times or $2700.00
NET NET COST is .20 Cents Credit for this
Down Side Risk is Removed, If we continue lower we will fly off, or remove upside call Credit Spread.
We elected to help hedge off this upside risk by a VXX PUT FLY
UPDATE 1
Original VXX FLY HEDGE
We haven't taken one single day of heat on this one, so we are going to lighten up.
Paid .66 cents 50x = $3300.00
Legged out of 1/5th or 20 percent
Credit $1.03 x 10x = $1030.00 - Net Cost -$2270.00
UPDATE 2
Closed 7x of the 15 Put Condor at $2.00 Credit or = $1400.00 Credit
Bot 5x of 15 Credit Spread, Spent .95 cents x 5 or = $475.00
This Helps clean up risk and margin.
Net Net Result, a smaller more manageable trade.
VXX FLY
Net Cost -$2270.00 SOLD 10x at $1.24 or additional $1240.00 Credit
Current Cost basis on FLY = -$1030.00 Holding +30x-60x+30
UPDATE 3
The Clean Up Prints
Boxing off Downside PUT TAIL RISK
BOX MATH
Credit $4.90
Original Credit spread portion of Iron Condor.
SOLD @ $15.45 - $14.65 (+.80 Credit)
Covered @ $0.10 Thru Box.
UPSIDE RISK BUY IN.
Sold @ $6.10 - $4.20 (+$1.90)
Covered @ -0.55 Cents (+$1.35)
Final Leg of Directional Condor.
Bot @ $-3.55 +$2.55 ($2.00 Debit)
Sold @ +2.50 (+0.55 Credit)
UPDATE 4
Closed 20x of 30x
20x @ $1.33 or $2660.00 Credit.
$1330.00 Cost basis = Credit $ 1330.00
Holding 10x (9 day)
Final CLOSE ON VXX FLY HEDGE.
10x @ $ 1.41 or $1410.00
VXX FLAT.
