Note to new readers: This is a regular update on the status of our XJO Iron Condor (Mark III) Model Portfolio. Please read the Trading Plan first in order to understand the objectives and the rules for trading this model portfolio.
Our October iron condor was another winning trade. We reached our profit target of 50% of credit collected on 16 September, 14 days after we opened our trade. The profit for our 5 contract trade was $1400. The performance of the XJO Iron Condor (Mark III) portfolio as at October 2015 is $1750.
We opened our October IC (a 5425/5625 call spread and a 4625/4425 put spread) on 2 September (43 DTE) when XJO was trading at around 5095. When we opened the trade, IV Rank was at 82%. Option premiums were rich after the sharp increase in IV in August and we managed to collect 56 points for our 20 delta iron condor. This is 27% higher than what we collected for our September IC. The October IC was also 912 points wide which is 53% wider than our September IC. As you can see from these numbers, iron condors are more profitable and have a wider profit zone if implied volatility (IV) is high when the trade is opened.
As usual, we will open our November iron condor after the October RBA meeting. I will provide another update on this model portfolio after the November trade is closed.
Disclaimer: This post is for educational purposes only and should not be treated as investment advice. This strategy would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek investment advice if required.