Sunday, October 26, 2014

November 2014 Nikkei 225 Iron Condor Adjustment

On Oct-27, I closed the Put Spread at 4.  Took in profit of 6 (JPY 30,000).  I immediately sold another Put Spread 14125/13875 at 15 (JPY 75,000).

N225 at 15348 (1223 points 7.96% downside)

Sell N225 October 14125 Put at 43 
Buy N225 October 13875 Put at 28 

Credit received : JPY 75,000
Days to expiration (DTE): 18

The reasons I close the Put Spread are:
1. It reached almost of project target of 70%.  Originally intention was to have IB auto close at 3 (1 point lower than the limit set as stated in this post).  Somehow, this round IB close at the limit set, 4.
2. At Delta 3 or 2, Spread value of 3 or 4, it no longer provide any protection for the Call Spread if N225 continues to go up.
3. To bring in more credit in anticipation of Call Spread adjustment.

I normally don't roll up when the DTE is less than 30.  However, the Dec Put Spread with Delta 9-10 was not attractive.

The Iron Condor is now 13875/14125/16000/16250.

Credit received : JPY 155,000 (75,000 + 80,000)
Max risk: JPY 1,0950,000
Margin: JPY 500,000
Days to expiration (DTE): 18

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