Cabot Options Institute Quant Trader – Alert (IWM)
With the market pulling back again today, our IWM iron condor is nearing our short put strike of 163. We’ve had a good start, with the Quant Trader service outperforming the market by a significant margin. Risk management has been a huge part of our success, mostly by locking in profits when we can lock in 50% to 75% of the original premium sold. But this time, we have a small loser on our hands with the potential of it kicking higher if IWM continues to push lower. As a result, I have decided to set a hard stop-loss for our IWM iron condor at $2.00. This will allow us to take all risk off the table and maintain overall profits in the portfolio, which speaks to the power of our approach as it has been a challenging environment for most investment strategies. Hopefully, the oversold state of IWM will lead to a push higher giving us the ability to take a potential profit, but if not, we want to be fully prepared by taking off our trade, maintaining overall profits and patiently waiting for more opportunities to arise. To be clear, I will not set a hard stop-loss in my platform, rather I will set a mental stop at $2.00 and take the iron condor off when the price of our IWM iron condor reaches those levels.
Here is the trade:
- Buy to close IWM October 21, 2022, 203 call strike
Sell to close IWM October 21, 2022, 208 call strike
- Buy to close IWM October 21, 2022, 163 put strike
Sell to close IWM October 21, 2022, 158 put strike…for a total of $2.00