OPENING: SPY DEC 21ST 253/257/290/294 IRON CONDOR
... for a 1.30/contract credit.
Layering on some additional slightly short delta SPY to my existing December setup to bring the entire position back to neutral.
Notes: In delta balancing existing setups, you have several basic options: (a) roll the untested side toward current price on significant decrease in value to reduce net position delta;* (b) add units to the side on which delta is needed (i.e., short puts/short put verticals if long delta is required; short calls/short call verticals if short delta is required); or (c) layer on a slightly skewed oppositional setup (short strangle/iron condor, short straddle/iron fly) that has the delta you need to balance the setup out or reduce directional delta.
Here, I'm opting for an oppositional setup, since it brings in more credit than just adding units to one side.
After layering on this additional position to what I've already got on out in December (see Post Below), I proceed to treat both trades as a single position for scratch point/take profit purposes: the scratch point of the original SPY iron condor was 1.94; with this position's credit of 1.30, the scratch point for the entire ball of wax is 3.24.
* -- I tend to roll at 50% max for the side and attempt to reduce position net delta by at least half.
Layering on some additional slightly short delta SPY to my existing December setup to bring the entire position back to neutral.
Notes: In delta balancing existing setups, you have several basic options: (a) roll the untested side toward current price on significant decrease in value to reduce net position delta;* (b) add units to the side on which delta is needed (i.e., short puts/short put verticals if long delta is required; short calls/short call verticals if short delta is required); or (c) layer on a slightly skewed oppositional setup (short strangle/iron condor, short straddle/iron fly) that has the delta you need to balance the setup out or reduce directional delta.
Here, I'm opting for an oppositional setup, since it brings in more credit than just adding units to one side.
After layering on this additional position to what I've already got on out in December (see Post Below), I proceed to treat both trades as a single position for scratch point/take profit purposes: the scratch point of the original SPY iron condor was 1.94; with this position's credit of 1.30, the scratch point for the entire ball of wax is 3.24.
* -- I tend to roll at 50% max for the side and attempt to reduce position net delta by at least half.
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