Star InactiveStar InactiveStar InactiveStar InactiveStar Inactive
 

The major market indexes all closed very close to their opening today. After a strong run-up in the morning, the selling began in the afternoon and pulled everything back. RUT closed at $580.24 after being as high as $586.

The market's strength this morning caused me to adjust both of my condors for September and October. I bought two Oct $620 calls at $9.80 for the Sept condor and the position ended the day at a P/L = -$610, delta = -$82 and theta = +$187.

I bought one Nov $640 call at $10.90 for the Oct condor and that position ended the day at -$820, delta = -$17 and theta = +$47. The improvement to the position from a risk management standpoint is apparent from the risk/reward curves before and after the adjustment; see how the risk/reward curve for today (red) is more vertical after the adjustment, indicating a smaller loss if the market continues upward. It allows us to hold the position and see if the market pulls back before closing the position, i.e., it buys us time. As it turned out, I probably didn't need to make these adjustments, but it is better to err on the side of caution in this business.

alt

alt